THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

GIFT  OF 


Gift  U.C.  Library 


Lineweaver  Bros..,  proprietors  of  the   ""Sta-KIene  Store,"  Harrisonburg,   Va.,   declare 

that  it  is  "some  satisfaction  to  do  business  when  you  know  what  you  are  doing. "  By 

analyzing  their  delivery  system  recently  these  brothers  cut  delivery  expense  40^  in  the 

face  of  a  40^  increase  in  business 


A  Better  Day's  Profits 

For  the  Retailer 

Who  Realizes  that  He  Can  Build  a 

Big  Business  Only  by  Getting 

and  Using  all  the 

Small  Facts 

By  A.  M.  BuRRC)UGHS 


Burroughs  Adding  Machine  Company 

Detroit,  Michigan,  U.  S.  A. 


Copy  right  1912  by  the 

Burroughs  Adding  Machine  Company 

Copyright,  1915 

First  Edition  25,000,  May  1,  1912 

Second  Edition  50,000.  November  1,  1912 

Third  Edition  50,000,  July  1,  1915 


To  the  Reader 

The  object  of  this  book,  of  which  this  is  the 
third  large  edition,  is  to  illustrate  the  necessity 
of  managing  a  retail  store  with  open  eyes.  There 
are  several  right  ways  of  doing  most  things,  but 
the  only  safe  way  is  to  know,  not  merely  guess, 
just  what  each  day's  business  has  produced  in 
profit. 

Since  the  first  edition  was  published,  upwards 
of  a  100  retail  and  trade  magazines  have  arranged 
to  print  it  as  a  series  of  articles,  and  it  has  been 
quoted  generally.  That  it  has  "hit  the  nail  on 
the  head"  with  business  readers  and  readers  of 
all  sorts  is  evidenced  by  the  following  quotations, 
which  are  just  a  few  of  the  words  that  have  been 
offered  in  commendation  of  its  message:      . 

"I  have  just  finished  reading  your  little  book, 
/A  Better  Day's  Profits.'  There  is  more  good 
business  contained  in  those  100  pages  than  all 
the  literature  I  have  ever  read  on  the  subject 
of  retailing."  Thus  write  Nesmith  &  Son,  the 
Square  Deal  Grocers,  Salina,  Kansas.  The 
Concordia  Milling  Company,  of  Concordia, 
Kansas,  said  this  about  it:  "You  have  presented 
a  number  of  points  that  the  average  business 
man  rarely  takes  into  account.  Also  some  old 
features  have  been  presented  in  an  absolutely 
new  way." 


Dr.  S,  0.  Martin,  Director  of  the  Bureau  of 
Business  Research,  Harvard  Graduate  School  of 
Business  Administration,  Cambridge,  Mass.,  says 
this  of  the  book:  "I  find  it  most  suggestive 
and  am  impressed  with  its  potential  value  to  the 
retailer." 

You  may  know  everything  we  have  put  in  the 
following  pages.  We  have  reason  to  believe  many 
retailers  don't.  Even,  however,  if  you  do  know 
all  we  have  told  you,  we  have  tried  to  put  it  in 
a  new  way  and  illustrated  it  with  stories  from 
actual  retail  life,  that  may  be  interesting  as  well 
as  instructive. 

If  any  part  of  this  book  is  obscure — if  you  do 
not  understand  it — we  may  be  able  to  hghten  up 
the  dark  places.  That  is  part  of  our  Research 
Service — which  we  gladly  offer  free  to  any  man 
in  business. 

Our  main  purpose  is  to  help  retailers  find 
the  most  efficient  way  to  run  their  business, 
conscious  that  when  they  have  reached  the 
greater  efficiency,  we  as  a  Company  will  come 
into  our  share  of  the  reward. 

Burroughs  Adding  Machine  Company 

Detroit,  Michigan 
July  1,1915 


Contents 

To  the  Reader 5 

Cutting  the  Guess-Work  Out  of  RetaiUng  .  9 

Managing  with  Your  Eyes  Open  ....  15 

Stretching  the  Capital 19 

Buying  for  Profit 23 

Stopping  Store  Leaks 29 

What  it  Costs  to  Do  Business 39 

Fixing  Prices  to  Get  a  Profit 45 

What  a  Sales  Record  Can  Teach  You     .     .  50 

Figuring  Stock  Turnovers 54 

The  Purpose  of  Inventory 58 

"Weighing"  Employees 62 

Cutting  Delivery  Expense 66 

Accounting  Good  at  the  Bank 71 

The  Boss's  Eye 75 

Paying  for  What  You  Don't  Get  ....  83 

Keeping  Books  With  a  Machine    ....  87 

Burroughs  Modern  Practice 91 


Richard  F.  Brune,  now  but  twenty-seven  years  old,  came  to  this  country  fifteen  years 

ago  wilh  only  S3  in  his  pocket.    Six  years  ago  he  bought  a  store  in  Saiitelle, 

California,  near  Los  Angeles.    Scientific  methods  have  enabled 

him  to  build  up  a  business  of  S  100,000  a  year 


8 


Cutting  the  Guess-Work  Out 
of  Retailing 

Then  and  there  I  decided  to  govern  my  business 
from  positive  knowledge  rather  than  from  guess 

THE  owner  of  a  little  drug  store  in  San  Francisco 
decided  that  there  must  be  a  reason  for  his  store 
remaining  small  while  other  stores  were  getting  big. 

He  set  himself  the  task  of  finding  the 
reason;  of  finding  why  it  wasn't  paying 
him;  of  finding  what  he  needed  to  know 
to  make  it  pay  him  the 
big  profits  he  knew  it 
ought  to  pay. 

He  found  the  reason: 
Now  instead  of  one  little 
drug  store  he  owns  sev- 
enteen   big    drug    stores.        "—instead  of  one  Uttle  drug  store—" 

Now  he  owns  a  fine  automobile  and  a  fine  home. 
His  check  is  good  for  anything  he  wants — he  is  making 
all  kinds  of  money. 

WITH  its  hundreds  of  stores  and  millions  of 
capital,  The  United  Cigar  Stores  Company 
started  from  an  "analysis"  of  one  little  cigar  store  in 
Syracuse,  New  York. 

If  the  owner  of  that  little  cigar  store  hadn't  looked 
for  and  eliminated  the  weak  places,  he  would  never 


■ — he  now  owns  seventeen  big  drug  stores- 


A  Better  Day's  Profits 

have  built  up  the  wonderful  chain  of  stores  which  he 
now  directs. 

He  asked  himself  what  he  needed  to  know  about 
the  business  to  eliminate  the  blunders;  to  make  every 
move  count  for  bigger  profits. 

By  making  his  records  show  him  Avhat  cigars  had 

sold,  he  was  soon  able  to  buy  cigars  that  sold  better. 

By  making  his  records  show  him  what  cigars  had 

not  sold,  he  cut  out  the  bad  bujang — the  stocking  up 

of  cigars  that  he  could  not  sell. 

He  found  out  how  many  smokers  passed  his  store 
every  day.  Then  he  moved  his  store  to  a  corner  where 
ten  times  as  many  smokers  passed  it  every  day. 

He  made  his  rec- 
ords show  which  of 
his  clerks  sold  the 
most  cigars  at  the 
best  profits.    Then 
he  studied  the  me- 
thods of  the  best 
clerk  and  got  more 
like  him  and  less  of 
the  other  kind. 
He  studied  the  attitude  of  his  clerks  towards  the 
smokers  who  came  back,  and  towards  those  who  didn't 
come  back.     Then  he  changed  the  attitude  of  the 
clerks  so  that  nearly  all  smokers  came  back. 

He  counted  the  seconds  necessary  to  serve  each 
smoker  at  the  rush  hour.  Then  he  cut  off  half  the 
seconds  with  little  tricks  of  shortening  steps.  He 
arranged  his  display  cases  and  his  boxes  so  each  clerk 
could  reach  every  box  from  where  he  stood. 


-Studied  the  methods  of  his  best  clerk — ' 


10 


Cutting  the  Guess-Work  Out  of  Retailing 


He  counted  the  steps  each  smoker  had  to  take 
inside  the  store.  Then  he  arranged  his  display  cases 
to  cut  out  every  unnecessary  step. 

He  made  it  possible  for  each  smoker  to  get  a  cigar 
while  waiting  for  a  car,  hurrying  to  work,  or  to  keep 
a  business  engagement. 

The  best  cigars,  the  best  clerks,  the  best  store,  all 
managed  in  the  best  way,  laid  the  foundation  for  a 
chain  of  more  than  a  thousand  stores— for  a  corpora- 
tion of  many  millions  of  dollars. 

And  the  man  who  analyzed  himself  and  his  oppor- 
tunities in  that  little  Syracuse  store,  now  directs  that 
chain  of  more  than  a  thousand  stores. 

A  DRY  GOODS  merchant  in  Oklahoma,  says  Sys- 
tem, the  Magazine  of  Business,  was  a  success  from 
his  community's  viewpoint,  and  a  personal  success 
as  far  as  he  knew.  He  stayed  close  to  the  business, 
did  as  much  of  the  work  as  he  could  himself,  bought 
only  when  he  needed  stock,  and  avoided  selling  on 
credit.     He  made  money— but  why  he  did  not  know. 

It  cost  him  $6,450  to  find  out  how  much  he  needed 
to  know. 

How?  He  was  burned  out.  The  fire  cost  him  over 
six  thousand  dollars,  but  it  freed  him  from  the  old, 
blind,  groping  of  an  unaccountable  success.  Getting 
his  lesson  was  expensive,  but  a  thorough  understand- 
ing of  it  has  netted 
him  820,000  since. 

When  he  came  to 
settle  up  with  the 
insurance  people  he 
couldn't  help  but 
see  that  he  had  been 
guessing,  although 

he  had  thought  that  ■•—was  a  success  us  far  as  he  knew 

11 


^! 


iiffmiiiit 


X 


A  Better  Day's  Profits 


ueiji;i,l  lecorils  to  tlirnw  the  searcli-liglil  of  cold 
facts  on  his  business — "' 


his    records 
were  A  No.  1. 

He  couldn't 
tell  the  ad- 
justers the 
simple  facts  of 
his  business. 
There  was 
no  ge  1 1  i  n g 
away  from  the 
fact  that  blind  luck  had  stood  behind  his  profits. 
True,  he  had  been  figuring  his  basic  expenses.  He  had 
been  charging  off  a  few  "extra  hard"  accounts  to  profit 
and  loss,  but  he  never  knew — here  is  his  six  thousand 
dollar  lesson  in  twenty  words — he  never  knew  where 
he  stood  until  stock-taking  was  over  and  the  year  a 
matter  of  history.  He  paid  $300  a  word  for  the  fact 
that  he  couldn't  show  the  adjusters  his  full  loss. 

Then  and  there  he  resolved  to  stop  guessing,  to 
departmentize,  to  have  records  that  would  throw  the 
search-light  of  cold  facts  on  his  office  costs,  his  clerk 
hire,  his  rate  of  turnover,  his  collections,  his  discounts 
and  depreciations,  his  entire  business. 

He  studied  other  stores.  He  gave  advertising  more 
attention.  And,  out  of  his  costly  experience,  and  with 
the  idea  of  waging  a  successful  fight  against  rising 
costs,  he  evolved  these  general  policies.  They  are  the 
"hows"  of  the  methods  that  have  increased  his  busi- 
ness approximately  4800  per  cent  in  ten  years: 

(1)  Departmentizing  the  stocks. 

(2)  Locating  the  rate  of  turnover  in  each  line.    • 

(3)  Speeding  up  the  rate  of  turnover  by  lines. 

This  last  policy  allies  itself  with  three  other  policies 
which  illustrate  some  of  this  retailer's  detailed 
methods: 


12 


Cutting  the  Guess-Work  Out  of  Retailing 

(1)  Watching  credits  closer. 

(2)  More  team  work  among  employees. 

(3)  More  service  that  really  pa.ys.    J 
Combined   with  the  other  policies   named,  these 

principles  helped  this  merchant  increase  his  rate  of 
turnover  through  his  entire  store  from  about  one-half 
in  1904  to  nearly  three  last  year.  That  means  money. 

A  retailer  cannot  get  the  most  out  of  fast-turning 
lines  until  he  knows  his  cost  by  lines.  He  cannot  get 
ahead  of  rising  costs — he  can't  even  make  a  safe 
income — except  by  great,  good  unreliable  luck — until 
he  stops  guessing. 

"Guessing  is  like  gambling  W'ith  a  'shark'." 


13 


4.  Meyer  &  Sons,  of  Erie,  Pennsylvania,  say,  "the  policy  of  getting  ihe  J„cts  is  an 
eye-opener.      We  know  the  exact  condition  of  each  department,  and  are 
able  to  act  accordingly.     There  is  no  guess-uork  about  it" 


14 


Managing  With  Yonr  Eyes  Open 

Mere  hard  work  will  not  bring  success. 
There  must  be  behind  the  work  a  "know- 
how"  that  will  make  it  accomplish  something 

A  RETAIL  hardware  man  kept  himself  so  busy 
with  the  little  things  of  his  business  that  he  had 
no  time  to  make  money. 

But  when  he  analyzed  his  methods,  himself,  his 
business,  to  find  the  reason  he  wasn't  making  money, 
he  found  he  could  unload  half  the  petty  work  he  was 
doing  onto  a  S3-a-week  boy. 

Then  he  began  to  understand  that  it  was  his 
business  to  manage,  to  think,  to  plan,  to  find  out  why 
things  should  be  done,  and  how  they  could  be  done  in 
the  best  way. 

He  found  that  anybody  could  do  the  things  that 
had  to  be  done  if  he  told  them  how. 

He  quit  using  the  brains,  the  enthusiasm,  the 
energy  of  his  business  for  the  office-boy  duties.  He 
devoted  himself  to  the  management  of  his  business. 

Now  he  is  a  merchant  prince,  the  head  of  a  great 
hardware  concern,  with  an  income  several  times  bigger 
than  his  gross  business  used  to  be. 

A  YOUNG  German  came  to  this  country  fifteen 
years  ago  at  the  age  of  eleven  with  but  S3  in  his 
pocket  and  not  a  word  of  English  in  his  vocabulary. 

He  obtained  emploj'ment  in  a  grocery  store  in 
the  German  quarter  of  a  New  England  city.  Here  he 
learned  the  grocery  business. 

Before  he  was  twenty  he  was  made  manager  of  the 
store.  When  he  was  twenty-one  he  was  appointed 
manager  of  a  bigger  Jersey  City  store.  Now,  at  twenty- 
seven  he  owns  a  prosperous  business  in  California. 

15 


A  Better  Day's  Profits 


iniiriiiHiiHirHiKMiii 


If  you  would  ask  him  how  he  succeeded,  he  would 
tell  you  that  he  always  made  it  a  point  to  know  the 
results  of  his  efforts. 

When  he  went  into  a  new  store,  he  wanted  to  know 
which  lines  of  goods  paid  a  profit  and  how  much. 
And  he  wanted  the  information  all  the  time,  not 
merely  for  a  few  days. 

He  wanted  to  know  whether  one  of  the  lines 
which  wasn't  moving,  began  to  produce  a  profit  when 
it  was  put  "up  front,"  and  whether  it  continued  to 
show  a  profit  after  it  was  put  back  to  give  some  other 
slow  line  a  chance. 

He  demanded  records  that  showed  him  whether 
clerk  No.  1  was  producing  a  profit.  When  he  found 
out  which  of  the  clerks  produced  the  most  profit,  he 
used  him  as  a  standard  for  the  other  clerks — or  their 
successors — to  work  up  to. 

A  CERTAIN    hardware    dealer   appealed   to   his 
jobber  for  a  solution  of  a  problem  which  he  was 
wise  enough  to  know  was  gradually  pulling  him  down. 
His  business  was  increasing,  much  faster  than  his 
expenses,  but  at  the  end  of  the  year  he  couldn't  find  the 
profit  he  thought  he  should  have. 
He  had  a  good  business.    He 
was  working  hard,  trying  to  plan 
and  manage  his  business.  He  was 
a  resourceful,  industrious,  clever 
merchant.  Yet  he  wasn't  making 
money. 

When  his  jobber  sent  an  ac- 
"— books  don't  tell  him—"  couutaut  to  go  ovcr  his  books,  it 
was  found  that  his  books  didn't  really  tell  him  any- 
thing about  his  business.  He  kept  accounts  that 
didn't  account. 

He  couldn't  find  out,  for  instance,  whether  it  paid 

16 


Managing  With  Your  Eyes  Open 


him  to  make  a  big  window  display  of  pipe  wrenches, 
at  a  big  discount  off  the  marked  price,  to  attract 
plumbers  and  gas  fitters  to  his  store. 

He  didn't  know,  for  sure,  whether  his  big  assort- 
ment of  knives  was  paying  him. 

In  fact,  he  didn't  know  anything  for  certain. 

He  was  wasting  his  energies,  his  enthusiasm  and 
his  brains  by  planning  and  doing  things  that  never 
got  him  anywhere. 

With  the  aid  of  an  accountant  he  put  in  a  bookkeep- 
ing system  which  enabled  him  to  get  accurate  reports 
on  the  results  of  each  day's  effort. 

Then  he  was  able  to  know,  pretty  quick,  which  line 
of  effort  produced  the  best  results,  the  most  profits. 

Now  the  difference  shows  in  his  bank  balance,  and 
the  fine  home  he  owns — his  business 
has  more  than  quadrupled  in  two  years. 

Yet  he  is  the  same  manager  in  the 
same  store,  selling  the  same  goods.  He 
has  just  cut  out  the  unprofitable 
methods. 

He  wasn't  incompetent  before.  He 
is  no  better  manager  now.  He  is  just 
managing  with  his  eyes  open.  --with  eyes  open-- 


During  the  next  few  years,  some  of  the  tidiest 
profits  in  American  Industry  will  be  saved  out  of 
operation.  Heretofore,  much  of  our  profit  has 
been  made,  but  saving  profit  is  a  different  thing 
altogether 

— "The  Saturday  Evening  Post" 


17 


Jfm.  M.  Brady,  of  Madison,  JTi,':.,  ronducts  a  store  with  his  eyes  open.     He  provides 
himself  with  accounts  that  account.     You  can  see  the  difference  in  his  bank  balance 


18 


-stock  43  years  old- 


Stretching  the  Capital 

Study  the  methods  of  the  banana  man  and  the 
peanut  vender,  who  make  a  living  on  $1 0  capital 

A  NORTHERN  Indiana  Furnishing  Goods  concern 
went  out  of  business  a  few  months  ago.  When 
the  stock  was  inven- 
toried some  caps  were 
found  which  were 
made  especially  for 
the  Grant-Colfax 
Presidential  Cam- 
paign in  1872. 

Think     of     that! 
Stock  43  years  old. 

The  caps  cost  about  25c  each  and  there  were  three 
dozen  of  them,  costing  $9  in  all,  wholesale. 

Charge  up  a  percentage  equal  to  the  cost  of  doing 
business  against  that  $9  worth  of  dead  stock  for  forty 
years  and  see  what  it  cost  the  merchant  to  keep  it 
on  his  shelves. 

Ask  the  banana  man  who  stands  at  the  corner  of 
Seventh  Street  and  Franklin  Avenue  in  St.  Louis,  how 
much  he  could  make  on  that  $9  in  forty  years  in  his 
business.  Then  you  will  know  what  it  would  have 
profited  this  clothing  concern  had  it  not  kept  that 
stock  on  the  shelves — if  it  had  used  the  capital  right. 

This  banana  man  buys  a  cart  load  of  bananas  every 
morning,  costing  him  about  S9,  and  sells  them  before 
night  for  $20. 

Since  he  works  every  day,  holidays  and  Sundays, 
he  turns  his  capital  every  day,  30  times  a  month. 

On  a  capital  of  $9  he  does  a  gross  business  of  more 
than  $5,000  in  the  nine  months  he  is  able  to  work. 

19 


A  Better  Day's  Profits 


IC^- 


m. 


BANK 


JN^g); 


1 


m\m\i 


®(D® 
® 


E 


In  forty  years  he  could  do  a  gross  business  of 
$292,000  on  that  Httle  capital — without  increasing  his 
capital   a  single  penny  over  that  original  $9. 

What  would  he  make  if  he 
had  $9,000  capital  and  ap- 
plied the  same  principles? 

Any  wonder  the  chain  store 
fellows  can  keep  buying  more 
stores  and  under-sell  the 
"good-enough-for-me"  one- 
man  store? 

The  owner  of  a  chain  of  six 
stores  has  never  put  a  single 
dollar  of  his  own  money  into 
the  last  four  stores  he  opened. 

When  he  opened  his  second 
store,  he  began  buying  in 
small  quantities,  stocking  up 
every  day  and  selling  the 
goods  before  the  billscamedue. 

In  a  short  time  he  opened 
his  third  store,  without  put- 
ting any  of  his  own  money 
into  it.  Soon  he  increased 
his  chain  to  six  stores. 

Now  he  is  doing  business 
almost  entirely  on  the  other 
man's  capital.  He  buys  in  very 
small  quantities  and  discounts 
his  bills  with  the  proceeds 
from  the  sales  of  the  goods. 

If  the  retailer  provides  him- 
self with  accurateand  complete 
detail  information  about  his 
sales  and  his  stock  on  hand, 

20 


"-lots  of  invest- 
ment— little 
profit — " 


' — no  invest- 
ment— lots  of 
profit — " 


Stretching  the  Capital 

he  can  practically  do  business  entirely  on  the  capital 
of  the  houses  from  which  he  buys — and  make  those 
houses  glad  to  let  him  do  it. 
^  Of  course  this  is  possible  only  by  keeping  such  close 
tab  on  sales  and  purchases  that  the  merchant  can  buy 
in  very  small  quantities. 

But  isn't  it  better  to  stand  the  expense  of  adequate 
records  and  do  a  big  profitable  business  on  little  capital, 
than  to  worry  along  without  records  and  do  a  small 
unprofitable  business  on  the  most  capital  you  can  rake 
and  scrape? 


-small  capital  rightly  used  may  outweigh  big 
capital  on  the  scale  of  profit — " 


The  newsboy  can  stretch  ten  cents  into  a  fair  income — 
he  turns  his  entire  capital  from  two  to  six  times  a  day 


21 


George  I.   Kelly  &   Co.,   Clothiers,   Hatters  and  Furnishers,   of  Waltham,   Mass.,   are 
believers  in  modern  accounting  methods.      They  are  making  it  pay 

22 


Buying  for  Profit 

The  goods  it  pays  to  handle 
are  the  goods  which  go  fast 

A  HABERDASHER  in  Chicago  built  his  business 
to  the  point  where  he  averaged  a  thousand  sales  a 
day  in  a  little  store  forty  feet  square — a  gross  business 
of  more  than  $200,000  a  year. 

In  this  little  store  he  kept  a  wider  variety  of  goods, 
and  made  more  real  net  profit,  than  most  stores  with 
five  times  his  space  and  ten  to  fifteen  times  his  capital 
and  expense. 

The  secret  of  his  suc- 
cess was  in  the  small 
amount  of  stock  which 
he  carried  and  the  fre- 
quency with  which  he 
turned  his  capital. 

He  planned  to  keep 
just  one  day's  supply  of 
stock  on  the  shelves  and  in  the  show  cases.  Every 
night  his  stock  was  replenished  just  enough  to  replace 
the  goods  removed  by  the  day's  sales. 

Accurate  records  for  several  years  enabled  this 
merchant  to  know  almost  exactly  how  much  he  would 
sell  of  every  line  each  day,  and  to  make  arrangements 
in  advance  for  this  sale. 

He  kept  a  two  weeks'  supply  of  each  line  in  his 
stock  room  on  the  fourth  floor,  where  rent  cost  him 
very  much  less  than  he  paid  on  the  first  floor. 

Each  night  he  sent  down  to  the  store  just  enough 
of  each  kind  of  stock  for  one  day's  business. 

By  knowing  almost  exactly  how  much  goods  he 
would  be  able  to  sell  of  each  line,  he  was  able  to_^make 

23 


A  Belter  Days  Profit 

quantity  contracts  with  his  jobbers  on  many  lines,  at 
quantity  prices,  with  semi-monthly  deliveries  and 
monthly  bills.     He  paid  after  he  sold. 

If  his  records  showed,  for  instance,  that  he  would 
need  1,000  shirts  of  a  certain  size,  his  order  to  the 
jobber  or  manufacturer  would  be  for  1,000  shirts  to  be 
delivered  in  quantities  of  three  dozen  every  other 
week. 

Every  month  he  got  a  bill  from  the  manufacturer 
or  jobber  for  six  dozen  shirts.  But,  he  had  probably 
sold  five  dozen  of  them  before  the  bill  came,  so  he 
could  take  the  discount  with  money  he  had  already 
received  from  the  sale  of  the  goods. 

He  invested  $10  a  week  in  salary  for  a  young  woman 
who  gave  her  whole  time  to  tabulating  sales  and 
expense  figures. 

The  report  this  young  woman  gave  him  every  day 
showed  not  only  the  number  of  sales  for  that  day  of 
every  line  of  goods  carried,  but  it  also  showed  a  com- 
parison with  the  preceding  day,  the  same  day  of  the 
preceding  week  and  the  same  day  of  the  preceding 
year. 

If  you  asked  him,  "How's  business?"  he  could  tell 
you,  for  his  policy  was  to  know.  He  didn't  guess  at 
his  figures. 

It  cost  him  $10  a  week,  a  sum  which  would  scare 
some  retailers,  but  it  enabled  him  to  do  a  gross  busi- 
ness of  $4,500  a  week  on  a  capital  that  was  less  than 
some  retailers  use  to  do  a  business  of  $100  a  week. 

THE  Maypole  Dairy  Company,  with  1502  stores 
scattered  all  over  England,  handles  its  vast  busi- 
ness in  exactly  the  same  way. 

Every  night  each  of  the  1502  stores  telegraphs  or 
telephones  the  exact  amount  of  sales  of  each  line  to 
the  home  office  in  London. 

24 


Buying  for  Profit 

The  home  office  immediately  ships  to  each  store 
just  enough  goods  to  put  the  stock  back  where  it  was 
before  the  previous  day's  business. 

"When  this  company  opens  a  new  store  it  puts 
$1,000  into  carefully  assorted  stock,  limited  to  the 
lines  which  experience  has  shown  will  sell  readily. 
Then  an  amount  is  added  each  day  to  keep  the  total 
up  to  the  original  stock. 

If,  at  the  end  of  the  day,  the  manager  wires  that  he 
has  sold  $500  worth  of  goods,  his  message  giving  the 
amount  sold  in  each  line,  the  home  office  will  immedi- 
ately ship  him  $500  worth  of  goods,  bringing  his  total 
back  to  $1,000. 

This  wonderful  chain  of  stores  turns  its  capital 
more  times  in  a  week  than  the  average  retailer  turns 
his  capital  in  a  year. 

Starting  with  an  original  investment  of  $1,000, 
some  of  these  stores  do  a  business  aggregating  $200,- 
000  a  year — one  hundred  and  thirtj'  or  more  complete 
turns  of  the  original  capital  in  a  year. 

Every  one  of  these  stores  is  required  to  keep  exact 
records  of  the  sales  of  every  kind  of  goods  carried. 

They  are  very  simple  records — just  a  number  for 
each  kind  of  goods  and  another  number  for  the  amount 
of  each  sale — but  they  are  a  wonder  of  completeness. 

A  CERTAIN  cigar  store  in  New  York  has  one 
customer  who  likes  a  particular  kind  of  cigar, 
the  retail  price  of  which  is  $4.75  a  box. 

This  store  keeps  only  two  boxes  of  those  cigars 
in  stock.  When  this  customer  goes  in  and  buys  one 
of  the  boxes,  which  he  does  regularly  every  two  weeks, 
another  box  is  ordered.  This  keeps  the  stock  always 
at  two  boxes. 

On  this  one  customer  this  one  store  does  a  gross 
business  of  $123.50,  in  one  brand  of  cigars,  with  an 


A  Better  Day's  Profits 

investment  of  $6.50 — supposing  each  box  of  cigars 
to  cost  $3.25  wholesale.  This  is  about  13  complete 
turns  of  the  capital  invested. 

If  this  store  didn't  keep  records  so  that  it  could 
always  know  where  it  stood,  it  would  likely  buy  a 
dozen  boxes  at  a  time — increasing  the  investment, 
reducing  the  number  of  times  the  capital  could  be 
turned,  and  letting  the  cigars  get  stale. 

IN  ST.  Louis  there  is  a  chain  of  furnishing  goods 
stores  which,  through  careful  buying,   succeeded 
last  3''ear  in  turning  its  entire  capital  fifteen  times. 
This  is  an  impossibility  except  under  scientific  man- 
agement— which  means  simply  the  keeping  and  using 
of  facts  instead  of  theories. 


" — where  it  can  get  quick  delivery — " 

This  chain  of  stores  buys  all  of  its  goods  in  St.  Louis 
where  it  can  get  quick  delivery  and  can  buy  in  small 
quantities. 

Some  of  the  lines  are  turned  every  week;  several 
more  every  month,  and.  the  entire  capital  at  least 
fifteen  times  a  year. 

THE  Saturday  Evening  Post  is  authority  for  the 
story   of   a   dry   goods   man   who   bought   just 
enough  goods  to  take  care  of  one  day's  sales. 

He  closed  his  store  at  the  end  of  the  first  day  and 
went  to  the  city  to  buy  a  new  stock.  He  arranged  for 
a  good  many  days'  supply,  to  be  shipped  as  he  needed 

26 


Buying  for  Profit 

it,  one  day's  supply  at  a  time,  cash  to  be  paid  on 
delivery. 

Now  he  owns  two  big  stores,  with  net  profits  of 
$25,000  a  year. 

A  BIG  wholesale  house  in  St.  Louis  estimates  that 
fully  95%  of  all  retailers  over -buy.  This 
wholesale  house,  unlike  many  others,  urges  its  custo- 
mers to  buy-in  small  quantities  and  buy  often. 

A  bright  salesman  with  his  eye  onlj^  on  the  orders, 
urges  the  retailer  to  stock  up  in  anticipation  of  a  raise 
in  prices,  or  to  get  an  extra  5%  discount. 

The  overhead  charge  against  the  11  dozen  cans  of 
tomatoes  on  the  shelves  which  don't  move,  quickly 
eats  up  the  5%  extra  discount  on  the  11  dozen,  and  the 
10%  which  the  merchant  makes  on  the  one  dozen  he 
succeeds  in  selling. 

If  a  merchant  buys  in  very  small  quantities,  he 
can't  lose  much  if  the  goods  don't  move.  If  they  do 
move,  he  has  the  money  in  hand  with  which  to  dis- 
count the  bills  when  they  come  due.  To  buy  little 
and  often  saves  rent  of  needless  space,  saves  handling, 
saves  deterioration,  keeps  the  shelves  and  cases 
orderly  and  generally  promotes  a  "clean  business." 

The  man  who  started  in  business  with  $5,000  and 
buried  half  of  it  in  the  ground,  was  better  off  than  the 
man  who  buries  half  his  capital  in  dead  stock  which 
doesn't  move. 

The  man  who  buried  his  monej^  in  the  ground 
didn't  pay  the  profits  he  made  on  the  other  half  to 
keep  it  in  the  ground;  the  man  with  half  his  capital 
in  dead  stock  has  to  pay  rent  and  all  of  his  cost  of 
doing  business  to  keep  this  dead  stock  on  the  shelves. 

27 


From  the  smallest  store  in  the  city^  the  David  Pender  Grocery  Co.,  yorfolk^   Virginia, 

grew  in  16  years  to  a  million-doUar-a-year  business,  under  David  Pender*s  personal 

management.    Pender  makes  his  accounting  methods  progress  with  the  business.    Figure 

facts  tell  him  every  day  just  where  his  profits  come  from 


28 


Stopping  Store  Leaks 

//  you  had  a  barrel  of  molasses  out  in 
the  warehouse  that  was  leaking,  when 
would  you  want  to  know  about  it,  the 
first  day,  or  when  the  barrel  was  empty? 


Over-Weight  and  Over-Measure 

FOOD  Inspector  Ottesen  of  Iowa,  while  checking 
weights  and  measures  at  Waterloo,  Iowa,  found 
five  grocers  whose  scales  gave  over-weight. 

These  five  pairs  of  scales, 
Ottesen  said,  "long  weighted" 
each  of  these  grocers  out  of 
hundreds  of  dollars  every  year. 
One  grocer  was  selling  about 
50  lbs.  of  lard  a  day,  at  J<4  oz. 
over-weight.  This  one  leak,  on 
one  kind  of  goods,  aggregated 

"—overweight  shortens  profit-"     about  $40  a  ycai.   ' 

Concrete  expression  is  given  to  the  losses  resulting 
from  over-measurement  in  this  little  excerpt  from  the 
store  paper  published  by  a  dry  goods  firm  in  Daven- 
port, Iowa. 

"Thirty-six  inches  is  a  good,  full,  generous  yard. 
The  clerk  who  gives  37  inches  of  25c  ribbon  throws 
away  4/5  of  a  cent.  Thirty-seven  inches  of  $2.00 
broadcloth  throws  away  7}/^  cents. 

Consider  this,  too.  That,  even  with  the  2oc 
material,  if  you  had  four  clerks,  each  of  whom  made 
four  such  errors  a  day  for  a  year  of  300  days,  your  loss 
would  amount  to  a  considerable  sum. 

29 


A  Better  Day's  Profits 

Bad  Buying 

The  average  retailer  is  a  poor  buyer.  Ninety  per 
cent  of  all  retail  stores  over-buy.  The  biggest  store 
leak  is  in  the  failure  of  the  retailer  to  turn  his  capital 
often. 

To  avoid  overbuying  the  retailer  should  keep 
accurate  stock  records.  The  use  of  sales  slips  is  indis- 
pensable in  keeping  these  records. 

He  should  know  the  markets  and  he  should  beware 
of  price  "inducements." 

An  estimated  profit  of  50%  is  a  loss  if  the  goods  will 
not  sell.  The  retailer  must  not  buy  because  the  goods 
are  cheap  but  because  they  will  sell  at  a  profit. 

Incompetent  Help 

Every  employee  in  the  retail  store  should  be  put 
on  a  merit  basis.  The  clerk  who  isn't  able  to  sell 
goods  at  a  profit  is  incompetent  and  unprofitable  to 
the  store.  Keeping  him  is  like  letting  the  faucet 
remain  open  in  the  vinegar  barrel — only  it  is  profits 
and  not  vinegar  that  is  leaking. 


Loss  of  Goods  from  Stock 

A  big  New  York  store, 
doing  a  business  of  $10,000,- 
000  a  year,  estimates  that  2% 
of  its  sales,  or  $200,000,  is 
stolen  from  the  store  every 
year.  If  this  same  proportion 

of  goods  is  stolen  from  the  "—shoplifters  stole  2%—" 

average  retail  store,  then  the 

store  doing  a  business  of  $50,000  a  year  would  lose 
$1,000  through  theft  of  goods  from  stock. 

30 


Stopping  Store  Leaks 


Failure  to  Charge  Goods  Sold  on  Credit 

When  a  sale  is  made  on  credit  and  no  record  is 
made  of  it,  the  retailer  stands  to  lose  the  profit  he 
should  make  on  the  sale;  the  original  cost  of  the  goods; 
the  time  which  has  been  invested  in  the  buying;  the 
time  invested  in  the  selling  of  the  goods;  the  cost  of  the 
labor  of  handling  the  goods;  the  cost  of  keeping  them 
on  the  shelves,  and  several  other  losses,  including  the 
big  loss  which  the  carelessness  will  cause  in  other  work. 

Wasteful  Bookkeeping 

It  costs  more  money  sometimes  to  keep  incom- 
plete records  in  an  unsystematic  way,  than  it  would 

cost  to  keep  com- 
plete records  in  the 
right  way. 

The  bookkeeping 
system  should  be  up- 
to-date.  It  should  be 
carefully  worked  out 
by  experts.  It  should 
be  especially  designed 
for  the  store.  It 
should  give  the  exact  information  needed,  as  econom- 
ically as  possible. 

Errors  in  Figures 

The  amount  of  money  lost  in  the  average  store 
every  year  through  mistakes  in  figures  is  enormous. 

^H  A  customer  gets  his  bill.  It 

is  a  little  less  than  he  expected, 
but  he  thinks  possibly  he  made 
a  mistake.  He  pays  on  your 
figures. 

If  it  happens  to  be  a  little 
more  than  he  expected  he  asks 
you  about  it,  nnd  you  spend 

31 


" — business  producing  information 
getting  away — " 


A  Better  Day's  Profits 

valuable  time   finding  the   error   and  correcting  it. 
If  you  make  a  mistake  in  your  figures  you  are  sure 
to  lose,  whether  it  is  against  you  or  against  the  other 
fellow. 

Failure  to  Charge  All  Expenses 

All  expenses  are  going  to  come  out  of  the  gross 
profits  whether  they  are  put  down  as  a  part  of  the  cost 
of  doing  business  or  not. 

If  a  man  pays  out  $20  a  month  for  rent,  he  will 
not  find  it  to  his  credit  in  the  bank  at  the  end  of  the 
year,  even  if  he  doesn't  charge  it  into  the  expense  of 
doing  business. 

The  same  applies  to  every  kind  of  expense  in  the 
business.  Every  one  of  the  leaks  mentioned  in  this 
chapter  is  an  expense,  whether  you  charge  it  as  such 
or  not. 

It  is  better  to  err  on  the  side  of  too  liberal  charging 
of  expenses  and  find  an  unaccounted-for  balance  in  the 
bank,  than  to  find  a  puzzling  deficit  caused  by  not 
charging  all  your  expenses. 

Failure  to  Discount  Bills 

If  a  retailer  turns  his  capital  four  times  a  year  and 
discounts  all  his  bills  at  2%,  the  clean  profit  from  this 
source  alone  amounts  in  a  year  to  8%  on  his  capital. 
If  he  doesn't  take  the  discount,  he  loses  it,  of  course. 

Undue  Delivery  Expense 

A  grocery  firm  in  Virginia  discovered  that  their 
delivery  system  was  costing  them  too  much.  So 
they  got  the  cost  of  running  expenses  in  figures  before 
their  eyes  and  learned — to  their  surprise — that  they 

32 


Stopping  Store  Leaks 


IIIIIMIIIIHIIHIIIIIMIIIMIIIIHI 


could  give  away  the  outfit  they  had,  could  install  a 
new  and  better  system  and  still  be  ahead  financially. 
Since  installing  the  new  outfit,  they  have  been  able  to 
cut  delivery  expense  40%  in  the  face  of  a  40%  increase 
in  business. 

Presents,  Donations,  Etc. 

Possibly  some  of  this  is  necessary.  Some  retailers 
make  it  a  matter  of  considerable  expense.  It  is  a 
leak  which  should  be  carefully  watched. 

Wasted  Time 

A  grocer  hired  a  man  capable  of  selling  $200  worth 
of  goods  a  week.  Bad  management  wasted  half  his 
time  and  he  only  sold  SlOO  worth  a  week.  The  grocer 
lost  the  profits  on  a  gross  annual 
.^^V_^  business  of  S5,200. 

^^  ^  When  you  hire  a  clerk,  you 

simply  buy  a  certain  amount  of 
his  time,  to  be  used  as  you  direct. 
If  you  direct  wrong,  or  he  wastes 
part  of  his  time,  you  lose. 

Time  can  be  wasted  in  a 
''Tom'esTuVofTrSs-'"  thousaud  ways.  Most  of  these 
are  under  the  control  of  the  employer. 

Most  of  the  waste  of  time  is  caused  by  bad  methods 
controlled  by  the  owner  of  the  store. 

The  Reduced-Price  Leak 

When  goods  are  marked  to  sell  at  $1.00  and  it  is 
necessary  for  any  reason  to  cut  off  10%,  the  reduc- 
tion from  the  marked  price  represents  a  loss. 

33. 


A  Better  Day's  Profits 


If  the  cut  is  necessary  to  make 
the  goods  sell,  it  is  a  loss  often 
due  to  bad  buying.  It  also  pro- 
duces another  loss  by  giving 
customers  the  impression  that 
the  original  price  allowed  an 
enormous  profit. 


" — price  cuts  come  out  of 
expected  profits — " 


Wasteful  Advertising 

One  retailer  used  space  two  columns,  ten  inches 
deep,  in  his  weekly  paper  to  run  a  poorly  worded  and 
poorly  arranged  announcement.  It  cost  him  $200  a 
year  and  produced  almost  nothing. 

A  competitor  used  half  as  much  space  and  changed 
his  advertisement  every  week,  using  strong  selling 
arguments.     His  business  grew  steadily. 

Advertising,  properly  directed,  is  one  of  the  most 
productive  investments  of  the  modern  retail  store, 
but  misdirected  advertising  can  be  very  wasteful,  or 
even  harmful. 

Extravagance  in  Lighting 

One  retailer  cut  the  cost  of  his  lighting  in  half  and 
at  least  doubled  the  efficiency  of  his  lighting  system  by 
studying  the  arrangement  of  his  lights.  The  proper 
lighting  system  puts  just  the  right  amount  of  light 
where  it  is  needed.  Light  is  a  salesman — that  is  why 
every  part  of  your  store  should  be  well  lighted. 

Arrangement  of  Store 

In  a  certain  store  each  clerk  had  to  walk  all  over 
the  store  to  wait  on  customers.  A  re-arrangement  of 
the  stock  stopped  this  and  cut  out  about  two  hours 
wasted  efforts  for  each  clerk  each  day — about  $60l) 
worth  of  time  in  a  year,  considering  the  several  clerks. 
This  time,  which  cost  money,  was  profitably  used. 

34 


Stopping  Store  Leaks 

Arrangement  of  Goods 

A  stationer  was  making  a  big  display  of  scratch 
pads  for  school  children  the  day  before  school  opened. 
When  he  came  in  from  lunch  he  stopped  to  look  in  the 
window,  and  noticed  the  absence  of  pencils.  Imme- 
diately he  went  in  and  caused  a  pencil  to  be  placed 
alongside  each  pad. 

This  suggested  the  connection  between  other  goods. 
On  investigation  he  found  that  scores  of  items  were  not 
in  their  proper  place  in  the  store.  He  had  them  placed 
where  the  customer  who  bought  one  item  would  see 
many  others  that  he  might  need  in  the  same  line.  This 
saved  much  walking  for  the  clerks  and  helped  each 
kind  of  goods  to  sell  others. 

Store  Alterations 

Special  sales,  special  displays  of  goods  and  the 
re-arrangement  of  departments  and  offices,  cause  nu- 
merous little  carpenter  jobs  in  the  store. 

These  little  jobs  are  often  the  source  of  a  consider- 
able leak  unless  they  can  be  done  opportunely  and 
efficiently. 

Some  carpenters  can  put  a  lot  of  time  on  a  little 
job,  and,  if  the  changes  are  not  properly  timed,  em- 
ployees of  the  store  are  often  compelled  to  waste  much 
of  their  time,  paid  for  by  the  store. 

Extravagant  Use  of  Supplies 

Sales  books,  report  blanks,  office  stationery,  state- 
ment forms,  blank  books  and  pens,  ink,  pencils,  etc., 
cost  a  neat  little  sum  in  a  year.  A  big  saving  can  be 
effected  by  proper  care  and  a  leak  is  pretty  apt  to 
follow  lax  methods. 

35 


A  Better  Day's  Profits 


-wusteful    piickiiiK    iiu^iiiis   wasted    tune, 
material,  business  and  profits — " 


Careless  Packing  of  Goods 

Goods   that   have   to   be    delivered    to    customers 

require  care  in  packing.     Much    merchandise    is 

damaged  or  entirely 
spoiled  by  poor  pack- 
ing. Money  is  wasted 
in  the  course  of  a  year 
through  the  use  of 
bigger  boxes  than  is 
necessary  and  through 
the  waste  of  time  in 
packing — time  that  is 
paid    for    with    good 

money  and  which,  if  saved,  could  be  used  for  other 

work. 

Lost  Containers 

Baskets,  boxes,  egg  crates,  etc.,  used  in  delivering 
goods,  cost  money.  The  number  lost  during  the  year 
usually  amounts  to  a  serious  leak. 

Wasted  Twine  and  Paper  Bags 

Even  in  little  stores  the  cost  of  wrapping  paper, 
twine,  paper  bags,  boxes,  etc.,  amounts  in  a  year  to 
a  neat  sum.  A  careless  employee  can  easily  cut  a 
slice  off  the  profits  by  a  wasteful  use  of  these  supplies. 

Clerks'  Mistakes 

Clerks,  working  at  small  salaries,  are  usually  care- 
less, inefficient  and  thoughtless.  They  make  enough 
mistakes  any  time,  but  when  tired  they  make  more. 

Unless  they  work  under  the  direction  of  a  system 
which  makes  their  work  nearly  mechanical,  and 
a  close  check  is  kept  on  their  mistakes,  they  will  likely 
do  as  much  harm  as  good. 

36 


Stopping  Store  Leaks 


-it's  easy  to  drive  away 
customers — " 


Dissatisfied  Customers 

A  regular  customer  is 
worth  from  SIO  to  S50  a 
year  to  the  average  retail 
store.  Some  customers 
are  worth  a  great  deal 
more. 

It  is  very  easy  to  drive 
customers  away.    Often 
it  is  hard  to  get  them. 
It  is  easy  to  lose  a  big  amount  of    money  through 
the  careless  handling  of  customers. 

Breakage  and  Spoilage 

A  careless  employee  will  spoil  a  very  large  amount  of 
merchandise  in  a  year,  cutting  deep  into  the  profits. 
Even  a  careful  employee  is  pretty  sure  to  spoil  some. 

Depreciation 

Certain  goods  shrink  in  weight;  others  in  size. 
These  facts  must  be  taken  into  consideration  both  in 
buying  and  in  selling.  Don't  buy  too  much.  Be  sure 
the  selling  price  covers  the  loss  of  shrinkage. 

Bad  Accounts 

To  be  sure  of  collections,  the  merchants  must  have 
accurate  and  complete  records.  The  slow-pay  cus- 
tomer may  not  remind  you  if  you  forget  his  bill. 

If  he  asks  you  for  a  statement  some  day,  when  he 
has  the  money,  and  you  can't  give  him  the  exact 
figures  at  once,  then  it's  your  loss  if  he  spends  the 
money  for  a  vacation  trip. 

Leaks  in  Your  Business 

The  leaks  suggested  here,  apply  to  your  business. 
Some  of  them  may  cause  you  only  a  little  loss.  Some 
may  be  swallowing  about  all  your  profits. 

37 


A  Better  Day's  Profits 


A  RETAILER,  who  is  not  now  in  business  (we'll 
call  him  Smith)  fooled  himself,  for  a  time,  into 
thinking  that  he  wasn't  losing  anything  through 
leaks  in  his  store.     He  refused  to  see  the  leaks. 

"I  watch  things  pretty  close,"  he  said,  ''and  I  know 
just  what  it  costs  me  to  run  my  business.  Jones,  down 
the  street,  is  a  crank  on  digging  out  expenses  to  charge 
up  against  his  business.     Not  for  me!" 

Jones  has  the  exclusive  business  for  his  section  now, 
and  is  a  very  prosperous  retailer.  The  sheriff  closed 
out  Smith's  business  over  a 
year  ago. 

Remember  this:  All  leaks 
and  other  expenses  in  your 
business  have  to  be  paid  at 
their  full  face  value,  whether 
you  see  them  or  not. 

If  the  sheriff  gets  your 
business,  don't  let  it  be  said 
that  he  got  you  because  you 
guessed  at  your  expenses. 


" — the  sheriff  closed  up  Smith — ■ 
Jones  now  has  his  trade — " 


Try  to  sell  your  own  goods  to  yourself 
once  in  a  while  and  then  take  notes 


38 


What  it  Costs  to  Do  Business 


A  retailer  may  fool  himself  by  failing  to 

charge  all  of  his  expenses  into  his  cost  of 

'>"•'  '"■'"  '"•""''-"oio  "/"•■'^  come 

ime 


ji.  reiauer  may  jooi  rumseij  uy  juuiny 
charge  all  of  his  expenses  into  his  cost 
doing  business  but  his  expenses  will  co 
out  of  his  gross  profits  just  the  sa'i 


RETAIL  grocers  in  a  certain  western  city  were 
at  one  time  paying  $1.40  for  a  50-pound  sack  of 
flour,  which  they  were  selling  for  $1.55.  This  allowed 
them  a  gross  profit  of  only  fifteen  cents  per  sack. 

The  Retail  Grocers'  Association  in  this  western 
city  took  up  this  problem  in  a  special  convention. 
Most  of  the  grocers  agreed  that  this  fifteen  cents  did 
not  allow  a  profit,  though  a  few  were  of  the  opinion 
that  they  were  making  a 
little  on  it. 

The  result  of  the  discus- 
sion was  an  investigation 
into  the  cost  of  doing  busi- 
ness in  that  city.  When  the 
different  grocers  began  pro- 
ducing their  books  to  show 
their  expenses,  a  very  wide 
range  of  costs  were  shown. 

Some  of  them  had  cost  systems  and  declared  it 
cost  them  22%  to  25%  to  do  business.  A  few,  while 
admitting  that  their  systems  were  not  very  complete, 
estimated  their  costs  at  10%  to  12%. 

The  final  result  of  the  investigation  was  an  agree- 
ment (those  who  knew  didn't  "agree")  upon  the 
average  of  15%  as  the  proper  and  correct  cost  of 
doing  business. 

But  this  average  was  plainly  incorrect  because  the 
low  figures  ranging  around  eleven  and  twelve  and 

39 


" — they  guess  the  averaRe  cost  is 
15  per  cent — " 


A  Better  Day's  Profits 


thirteen  per  cent  were  from  the  stores  of  grocers  who 
did  not  figure  to  make  anything  over  a  reasonable 
salary  for  themselves;  who  did  not  figure  to  make  any- 
thing on  the  investment  in  the  store  buildings  they 
happened  to  own;  who  did  not  figure  for  interest  on 
their  investments,  and  who  overlooked  a  score  or  more 
important  items  that  should  be  included  in  the  expenses. 
The  high  percentages,  ranging  around  twenty  to 
twenty-five  per  cent,  were  from  the  stores  of  retailers 
who  had  applied  a  searching  cost  system  to  their 
business.  These  merchants  were  charging  up  to 
their  business  every  item  that  could  be  considered  as 
expense  and  it  made  their  expenses  seem  high. 

The  investigators  took  these  high  percentages, 
which  were  about  correct,  and  the  low  percentages, 
which  were  eight  or  ten  to  fifteen  per  cent  too  low,  and 
combined  the  whole  list  to  arrive  at  the  average  of 
fifteen  per  cent.  Now  a  good  many  retailers  who 
think  they  are  fixing  prices  right,  are  puzzling  over 
their  failure  to  find  the  profit  they  expected  last  year. 
The  cost  of  doing  business  is,  of  course,  just  the 
same  whether  a  merchant  includes  all  of  the  items  or 
only  a  few  of  them  in  his  expense  account. 

The  only  difference  is  that  he  deludes  himself  into 
thinking  that  the  cost  of  doing  business  is  only  15% 
when  in  reality  it  probably  is  20%  to  25%. 

If  he  fools  himself  in  this 
way,  and  figures  for  a  10% 
profit,  the  chances  are  that 
the  expenses  and  the  extra 
cost  of  doing  business,  which 
he  hasn't  figured  into  his  per- 
centages, will  eat  up  that 
profit,  and  leave  him  holding 
'"doSpay-"''  the  sack  at  the  end  of  the  year. 

40 


What  It  Costs  To  Do  Business 


A  CLEVELAND  grocer  thought  he  was  clearing 
$100  a  month,  SI, 200  a  year,  over  and  above 
his  expenses. 

But  the  $100  a  month  included  his  own  salary,  the 
interest  on  his  investment,  the  salary  of  his  wife  who 
spent  most  of  her  time  in  the  store,  and  a  number  of 
other  items. 

If  the  grocer  had  allowed  himself  interest  on  his 
investment,  that  alone  would  have  produced  $50  a 
month  without  risk  or  worry. 

Another  $25  a  month  of  his  "profits"  rightly  came 
out  as  expenses  incurred  in  running  the  store.  He  had 
charged  several  expense  items  as  "investment." 

Instead  of  making  $100  a  month  clear,  he  was  not 
only  failing  to  make  anything,  but  he  and  his  wife  were 
both  working  for  almost  nothing. 

If  they  had  both  worked  in  some  other  store  they 
might  have  earned  $100;  so  instead  of  making  $100 
thev  were  losing  $100  a  month. 


ONE  grocer  in  Pittsburgh  was  interested  in  politics 
and  finally  he  succeeded  in  landing  a  city  job, 
pajdng  him  $2,500  a  year. 

When  he  got  this  job  he 'decided  to  sell  his  store. 
He  placed  the  store  in  the  hands  of  a  broker,  and  had 

an   accountant   go 


over  the  books  to 
place  a  value  on  the 
stock  and  to  see 
what  the  business 
was  worth. 

The  accountant's 
report  showed 
that  no  charge  had 
been    made    for 


" — the  family  lielps — for  nothing — " 

41 


A  Better  Day's  Profits 


salaries.  The  grocer,  his  wife  and  four  children  ran  the 
store.  When  proper  allowance  was  made  for  salaries, 
the  store  was  found  to  be  paying  a  fraction  over  one- 
half  of  one  per  cent  a  year  on  the  investment. 

Instead  of  a  fairly  profitable  business,  one  salable 
at  a  premium  for  good  will,  it  was  found  to  be  a  busi- 
ness so  nearly  unprofitable  as  to  be  unsalable. 

Fixtures  and  stock  were  finally  sold  at  a  loss.  Noth- 
ing was  received  for  good  will,  because  there  was 
no  good  will — only  a  chance  to  work  for  nothing  and 
take  the  ordinary  business  risks  besides. 

In  scientifically  managed  stores  it  has  been  found 
that  the  salaries  of  the  clerks  average  around  nine  per 
cent  of  the  gross  sales  by  those  clerks. 

The  salaries  of  managers,  bookkeepers  and  other 
emploj'ees,  who  do  not  sell,  run  the  average  cost  for 
salaries  up  to  about  thirteen  to  thirteen  and  a  half  per 
cent  of  the  gross  sales. 

Rent  is  likely  to  average  around  four  per  cent, 
delivery  around  one  and  a  half  to  two  per  cent,  light 
and  heat  from  one  to  two  per  cent,  and  so  on  down 
the  list  of  expenses. 

No  merchant,  as  he  so  frequently  does,  should 
assume  these  percentages  to  be  his  costs.  He  should 
get  his  own  costs  from  his' business,  considering  these 
percentages  only  as  standards  by  which  to  judge 
whether  he  is  higher  or  lower  than  the  average. 

The  merchant 
who  would  know 
his  cost  of  doing 
business  should 
classify  his  expenses 
into  such  accounts 
peNSE  as  will  give  him 
the  information  he 


-searching  out  expenses  so  he  can  know 
his  profits — " 


needs. 


42 


What  It  Costs  To  Do  Business 

He  should  install  a  cost  system  that  will  search  out 
all  of  the  expenses  and  enable  him  to  know,  not  merely 
a  few  of  the  things  which  he  pays  for,  but  all  of  the 
things  which  enter  into  his  cost  of  doing  business. 

Here  is  a  list  of  the  expenses  used  by  one  wide 
awake  merchant: 

Rent — if  the  building  is  leased;  depreciation  or 
upkeep  if  it  is  owned. 

Salary — of  all  employees,  and  the  manager. 

Delivery  £'xpe/2se— including  repairs  to  wagons, 
harness,  shoeing  of  horses,  grease,  feed,  barn,  rent,  etc. 

Light — including  light  in  barns,  etc. 

Heat — including  coal,  fireman,  etc. 

Ice — for  drinking  fountains,  refrigerators,  soda 
fountains,  etc. 

Advertising — in  newspapers,  circulars,  etc. 

Printing — stationery,  blank  books,  bill  heads,  etc. 

Gifts — presents,  donations,  etc. 

Telephone  and  telegraph  tolls. 

Insurance — stock,  fixture,  burglar,  etc. 

Taxes — on  fixtures,  stock,  etc. 

Interest— paid  out. 

Paper  Bags — wrapping  paper,  twine,  etc. 

Breakage  and  spoilage  of  goods. 

Repairs— on  fixtures,  etc. 

Depreciation  on  merchandise. 

Shrinkage  of  merchandise. 

Depreciation  on  fixtures,  furniture,  etc. 

Bad  accounts. 

Goods  stolen  from  stock. 

Depreciation  from  cost  price  by  change  of  style  and 
by  the  purchase  of  unsalable  stock  which  makes  it 
necessary  to  reduce  prices.     ' 

Some  merchants  add  freight  and  cartage  to  this  list 
but  it  should  not  be  charged  as  an  expense.  It  is  a 
part  of  the  original  cost  of  the  goods  and  should  be 
charged  to  goods  and  not  to  expense. 

43 


A  Better  Day's  Profits 


These  rules  for  figuring  costs  and 
profits  are  recommended  by  the 
National  Association  of  Credit  Men 

l-Chargo  interest  on  the  net  amount  of  your  total  investment 
at  the  beginning  of  your  business  year,  exclusive  of  real 
estate. 

2-Charge  rental  on  all  real  estate  or  buildings  owned  by  you 
and  used  in  your  buisness  at  a  rate  equal  to  that  which 
you  would  receive  if  renting  or  leasing  it  to  others. 

3-Charge  in  addition  to  what  you  pay  for  hired  help  an 
amount  equal  to  what  your  services  would  be  worth  to 
others;  also  treat  in  like  manner  the  services  of  any  member 
of  your  family  employed  in  the  businesss  not  on  the  regular 
pay  roll. 

4-Charge  depreciation  on  all  goods  carried  over  on  which  you 
may  have  to  make  a  less  price  because  of  change  in  style, 
damage  or  any  other  cause. 

5-Charge  depreciation  on  buildings,  tools,  fixtures,  or  any- 
thing else  suffering  from  age  or  wear  and  tear. 

6-Charge  amounts  donated  or  subscriptions  paid. 

7-Charge  all  fixed  expenses,  such  as  taxes,  insurance,  water, 
lights,  fuel,  etc. 

8-Charge  all  incidental  expenses,  such  as  drayage,  postage, 
office  suppUes,  hvery  or  expenses  of  horses  and  wagons, 
telegrams  and  telephones,  advertising,  canvassing,  etc. 

9-Charge  losses  of  every  character,  including  goods  stolen  or 
sent  out  and  not  charged,  allowance  made  customers,  bad 
debts,  etc. 

10-Charge  collection  expense. 

ll-Charge  any  other  expense  not  enumerated  above. 

12-When  you  have  ascertained  what  the  sum  of  all  the  fore- 
going items  amounts  to,  prove  it  by  your  books,  and  you 
will  have  your  total  expense  for  the  year;  then  divide  this 
figure  by  the  total  of  your  sales,  and  it  will  show  you  the 
per  cent  which  it  has  cost  you  to  do  business. 

13-Take  this  per  cent  and  deduct  it  from  the  price  of  any 
article  you  have  sold,  then  subtract  from  the  remainder 
what  it  cost  you  (invoice  price  and  freight),  and  the  result 
will  show  your  net  profit  or  loss  on  the  article. 

14-Go  over  the  selling  prices  of  the  various  articles  you  handle 
and  see  where  you  stand  as  to  profits,  then  get  busy  in 
putting  your  selling  figures  on  a  profitable  basis  and  talk  it 
over  with  your  competitor  as  well. 


44 


Fixing  Prices  to  Get  a  Profit 

Nine-tenths  of  all  retailers  are  making 
less  than  they  think  they  are.  They  are 
ahvays  surprised  when  they  find  it  out 

A  RETAIL  hardware  store  in  a  small  Wisconsin 
town  had  been  dragging  along  for  several  years, 
s  uppo  sedly 
making  a  profit. 
Three  differ- 
ent men  had 
gone  into  part- 
nership with, 
the  original 
owner  and  after 

a  year  or  so  had  "— 'guessins-  is  lik.-  gambling  with  a  •shark'—" 

withdrawn,  leaving  a  part  of  their  capital  behind  them 
as  "pay"  for  the  "experience." 

The  fourth  partner  was  a  young  accountant  who 
had  spent  a  year  in  the  accounting  department,  and 
another  year  in  the  selling  department,  of  a  city  store. 
When  he  formed  the  partnership  in  the  country  store, 
he  determined  to  find  out  just  how  things  stood — 
though  he  wasn't  entirely  familiar  with  the  way  three 
partners  had  already  been  frozen  out. 

He  soon  learned  that  most  of  the  hardware  man's 
profits  were  imaginary.  While  the  sales  ran  to  a 
nice  figure,  the.  profits  were  mostly  on  paper. 

His  trouble  was  that  while  estimating  his  cost  of 
doing  business  as  a  certain  percentage  of  the  gross 
business,  which  is  the  selling  price,  he  added  this 
same  percentage  to  the  cost  price  when  figuring  the 
selling  prices  of  individual  items. 

This  mixing  of  methods  resulted  in  a  loss,  except  on 

45 


A  Better  Day's  Profits 

a  few  articles  which  permitted  a  very  high  percentage 
of  profit. 

They  handled  a  certain  kind  of  stove  in  this  store 
which  was  also  handled  by  a  competitor.  The  whole- 
sale price  was  $9.25,  and  the  freight  and  cartage  were 
75  cents,  making  the  stove  cost  $1 0,  set  down  in  the  store. 

Competition  was  very  keen  on  this  stove  and  it  was 
decided  to  cut  the  profit  to  10%  net.  So  18%  of  the 
cost  was  added  for  cost  of  doing  business  and  10%  for 
profit,  making  the  stove  sell  at  $12.80. 

The  hardware  man  thought  he  was  making  a  profit 
of  $1.  Let  us  see  what  the  new  partner,  an  account- 
ant, showed  him. 

As  the  article  cost  $10  and  it  was  desired  to  make 
28%  gross  profit  (enough  to  cover  18%  for  cost  of 
doing  business  and  the  10%  for  net  profit),  he  con- 
sidered the  selling  price  as  100%  and  the  cost  price  as 
72%,  or  all  of  that  100%  except  the  gross  profit  of  28%. 

Now  if  $10  is  72%  of  the  selling  price,  the  selling 
price  must  be  $13.89. 

Here  is  the  way  he  worked  it  out: 

Selling  price  100% 

Cost  of  doing  business  18%  

Net  profit  desired  10%  

Gross  profit  ....  28% 

Wholesale  cost  72% 

Cost  price  in  percentage  .72)  $10,000  cost  inmonov 

$13,888  Selling  Price. 
Here's   an   analysis    of   the 
problem : 
72%=$10 

l%=l/72  of  $10  or  10/72 
100% -=100  X  10/72  or 

1000/72  or, 
$13,888 
-agteniabed  by  the  facts-"      Reducing  the  problem  back, 

46 


Fixing  Prices  to  Get  a  Profit 


to  prove  it,  we  have : 

$13 .  89     Selling  Price 
28     Percentage 

lllf2 

2778 


$3 .  8892     Gross  Profit  in  dollars 
$13.89     Selling  Price 
3.89     Gross  Profit 
$10.00 
On  the  senior  partner's  method  of  figuring  it  took 
$2.30  of  the  $2.80  gross  profit  to  cover  the  18%  cost  of 
doing  business. 

A  MICHIGAN  grocer  did  a  gross  business  of  $20,000 
last  year.  His  cost  of  doing  business,  including 
spoilage  of  goods  and  incidentals,  was  $4,600  or  23% 
and  he  figured  for  10%  net  profit. 

His  purchases  during  the  year  aggregated  $15,000. 
To  this  he  added,  in  the  process  of  marking  each  item 
during  the  year,  the  gross  profit  he  wanted  to  make, 
33%,  marking  the  goods  to  sell  at  $20,000 

His  banker  asked  him  recently  how  much  profit  he 
made  last  year.  He  said  $2,000—10%  on  his  $20,000 
gross  business. 

He  made  the  mistake  of  assuming  that  33%  added 
to  his  cost  was  the  same  as  33%  of  his  selling  price. 

Let's  see  how  far  he  was 
wrong.  Adding  33%  to 
$15,000  makes  $19,950. 
33%)  of  $20,000  taken  from 
$20,000  leaves  $13,400. 

If  he  paid  $15,000  for  the 

goods  he  sold  for  $20,000, 

and  his  cost  of  doing  business  was  $4,600, 

his  net  profit  was  $400.     $400  is  only 

2%  on  $20,000.      And  he  thought  he 


■'—$1,600  less 

than  he 

expected — " 


was  making  10%. 


47 


A  Better  Day's  Profits 

IT  is  not  claimed  that  this  method  of  figuring  profits 
on  the  selling  price  is  the  only  proper  method. 
School  arithmetics  have  always  taught  that  in  percent- 
ages, the  cost  price  is  the  base.  And,  if  it  is  remembered 
that  the  per  cent  of  profit  added  to  the  cost  price  is 
always  a  profit  on  the  cost  price  and  not  a  percentage 
on  the  money  taken  in,  that  method  is  all  right.  How- 
ever, as  your  profit  is  to  come  out  of  the  selling  price, 
it  is  considered  by  many  to  be  safer  to  figure  on  the 
selling  price. 

DON'T  get  your  percentages  mixed!  That  is  the 
crux  of  the  whole  matter  of  figuring  profits.  The 
percentage  of  profit  and  the  percentage  of  cost  of  doing 
business  should  be  figured  on  the  same  base.  When 
they  are,  all  the  retailer  needs  to  do,  is  to  be  sure  that 
his  average  mark-up  will  give  him  the  margin  of  profit 
that  he  deserves  and  expects;  and,  in  case  he  does  not 
have  that  margin  on  his  books,  in  his  cash  drawer,  or 
in  the  bank,  at  the  end  of  an  inventory  period,  he 
should  make  it  his  business  to  find  out  why. 


48 


Here  are  two  views  of  U.  A.  Ballou's  up-to-the-minute  paint  store  in    Worcester,' Mas 
A  girl  keeps  the  records  which  show  Mr.  Ballou  just  what  he  accomplished  yester- 
day as  compared  with  the  same  day  last  week,  last  month,  and  a  year  ago 


49 


What  a  Sales  Record  Can 
Teach  You 


It  is  by  knowing  what  has  sold,  that 
the  chain  store  fellows  are  able  to  make 
such  enormous  sales  on  such  a  small  stock 


THE  banana  man  who  sells  his  entire  stock  of 
bananas  every  night  can  tell  you  the  exact  number 
of  bananas  purchased  and  the  exact  number  sold 
during  any  business  day. 
He  knows  all  there  is  to 
Iqiow  about  the  "sales  end" 
of  his  business.  It  isn't 
guess  work  with  him.  He 
knows  absolutely  what  he 
has  done;  what  he  has  sold; 
what  he  has  purchased; 

"turns  his  stock  at  least  once 

what  profit  he  has  made.  a  day— " 

With  him  each  day's  business  is  a  separate  business, 
just  as  much  so  as  if  he  were  a  banana  merchant  on 
Monday,  a  peanut  vender  on  Tuesday,  and  a  baseball 
player  on  Wednesday. 

If  he  over-buys,  he  just  cuts  the  price  to  make  his 
stock  move.  He  doesn't  carry  any  dead  stock.  It 
isn't  necessary  to  take  an  inventory  at  the  end  of  the 
day  to  find  out  how  much  stock  he  has.     He  has  none. 

What  he  doesn't  know  about  his  sales  and  purchases 
isn't  worth  bothering  about. 

He  has  a  "statement  of  his  business"  that  makes 
him  look  like  a  wizard  compared  to  most  retailers. 

He  has  sales  analysis  down  to  a  fine  point. 

Yet  the  banana  man  doesn't  need  to  keep  books. 

50 


A  Better  Day's  Profits 

He  has  only  one  line  of  goods;  he  is  his  own  and 
only  clerk;  he  closes  out  his  business  every  day — it  is 
comparatively  simple  to  arrive  at  all  the  sales  facts. 

But  even  the  smallest  retailer  has  a  much  more  com- 
plicated business. 

The  average  retailer  has  many  lines  of  goods.  He 
has  several  clerks.  He  doesn't  close  out  his  business 
every  day.  It  continues  from  day  to  day,  week  to 
week  and  month  to  month.  He  doesn't  even  close  it 
out  at  the  end  of  the  year. 

On  account  of  its  being  bigger,  he  can't  know  as 
much  about  his  business  unless  he  uses  bigger  methods 
for  getting  the  information. 

If  a  man  has  a  mind  big  enough  and  magic  enough 
and  superhuman  enough  to  grasp  all  the  details  of  a 
big  retail  business  and  to  store  them  up  in  his  memory 
for  weeks  and  months — ' 

Well,  then,  he  would  be  wise  enough  to  use  records 
instead  of  brain  cells  for  a  bookkeeping  system. 
■    He  would  do  just  what  all  the  successful  retailers, 
the  chain  store  fellows,  and  the  really  successful  one- 
man  businesses  are  doing. 

THERE  is  a  chain  of  big  clothing  stores,  doing 
business  in  a  number  of  cities,  employing  from 
twenty-five  to  a  hundred  clerks  in  each  store,  which 
can  give  you  just  as  complete  information  about  its 
sales  as  can  the  banana  merchant  who  sells  but  one 
line  of  goods,  has  but  one  clerk,  and  who  closes  out 
his  business  every  day. 

This  chain  store  company  is  not  unusual;  its  meth- 
ods are  unusual  only  in  that  they  are  typical  of  the 
methods  of  other  successful  merchants  in  every  line 
of  business. 

iFor  every  sale  that  is  made  in  each  of  the  stores  in 
this  chain,  the  clerk  makes  out  a  sales  slip  giving  the 

51 


A  Better  Day's  Profits 


name  and  amount  of  the  goods  sold  and  the  price. 
The  bookkeeper  tabulates  this  information  and  is 
able  to  tell  at  the  end  of  the  day  how  much  goods  of 
each  line  has  been  sold,  the  number  and  the  amount  of 
the  sales  by  each  clerk,  the  number  and  the  volume  of 
sales  in  each  department,  and  number  and 
^  the  volume  of  sales  in  the  entire  store. 

In  the  home  office,  the  bookkeeper  tabu- 
lates this  information  so  that  the  managers  of 
the  great  corporation  which  conducts  the 
stores  can  tell  at  a  glance  exactly  what  profit 
has  been  produced  by  each  line  of  goods,  and 
by  each  clerk  in  each  store,  j 

If  the  expenses  in  each  store,  for  instance, 
exceed  by  one-fourth  of  one  per  cent  the  estab- 
lished average  on  the  total  sales,  that  store  is 
going  to  hear  from  the   Home 
Office  ])efore  long. 

Each  store  is  allowed  about  10 
to  103^%  of  its  total  sales  as  sal- 
aries. After  the  manager's  salary 
in  each  store  is  taken  out  and 
allowance  made  for  bookkeepers, 
stenographers,  janitors,  watch- 
men, etc.,  about  83^%  to  9%  is 
left  to  pay  the  clerks. 

If  a  single  clerk  shows  sales  in 
^//       such  small  amount  as  to  raise  the  percentage 
Ml  I        represented  by  his  salary  to  above  9%,  he  will 
very  quickly  hear  from  the  manager. 

If  the  condition  continues  for  any  con- 
siderable length  of  time,  the  clerk  is  certain  to 
be  dropped  and  some  one  else  put  in  his  place 
who  can  reduce  the  cost  of  sales  behind  his 
counter  to  9%  or  less. 

52 


from 
branch  ofEce  rec- 
ords—" 


What  a  Sales  Record  Can  Teach  You 

If  a  clerk  sells  enough  goods  to  bring  the  percent- 
age represented  by  his  salary  down  to  less  than  8%  of 
his  sales,  the  management  watches  him  and  soon  raises 
his  salary  or  promotes  him. 

And  then  if  a  certain  line  of  collars,  for  instance, 
doesn't  sell  as  readily  as  some  other  line,  the  line  which 
sells  best  (the  store  is  in  position  to  know  what  lines 
sell  best),  will  soon  be  the  only  line  of  collars  carried — 
the  line  which  will  be  pushed. 

With  complete  sales  information  these  stores  are 
able  to  quickly  eliminate  the  goods  which  won't  sell 
and  to  replace  them  with  goods  which  will  sell. 

And  no  store  which  doesn't  keep  a  complete  record, 
and  which  doesn't  push  lines  which  show  a  fair  profit 
and  drop  lines  which  don't,  can  long  hope  to  compete 
with  stores  like  those  in  this  chain. 

Apply  these  methods  to  your  business  for  a  while 
and  see  if  you  don't  increase  your  sales  and  decrease 
your  ratio  of  expenses. 


During  the  year  191  It  over  12,000  retail  mer- 
chants went  into  bankruptcy  in  this  country, 
and  there  was  a  reason  for  every  single  one  of 
these  failures.    They  did  not  just  happen 


53 


Figuring  Stock  Turnovers 

Business  is  a  tank  of  profits.  Capital  is  a  myriad  of 
sponges.  The  sponges  should  be  constantly  put  into 
the  tank,  one  at  a  time,  then  taken  and  squeezed  dry 


A  SHOE  dealer  bought  ten  pairs  of  shoes  at  $2  a 
pair  and  sold  them  at  $3  a  pair,  costing  him  $20 
and  selling  for  $30.  He  turned  his  capital  once,  at 
33}^%  gross  profit  on  the  selling  price. 

An  implement  dealer  bought  a  wheelbar- 
row at  $2  and  sold  it  for  $; 
bought  and  sold  another  and 
another  and  another  until  he 
had  sold  ten,  costing  him  $20 
and  selling  for  $30. 

He  turned  his  capital  ten 

times,  at  333/3%  on  the  selling       "_ turning  capital  often  means 

price  at  each  turn.  many  profits-- 

One  merchant  makes  33  3/^%  on  his  investment. 
The  other  makes  333}/^%,  gross.  The  difference  is 
that  one  man  invests  $20  once.  The  other  man  invests 
$2  ten  times.     Both  do  a  gross  business  of  $30. 

If  both  had  $20  at  the  start,  the  Implement  Dealer 
could  have  invested  his  other  $18  in  a  dozen  other 
items.  By  the  time  the  Shoe  Dealer  had  sold  his 
whole  ten  pairs  of  shoes  the  Implement  Dealer  would 
have  sold  ten  each  of  the  other  twelve  items. 

Capital  is  turned  once  when  it  is  invested  in  stock 
and  all  the  stock  is  sold. 

In  practice  this  becomes  very  complicated,  because 
a  part  of  the  capital  invested  is  released  almost  im- 
mediately and  put  back  into  additional  stock. 

54 


Figuring  Stock  Turnovers 


This  has  the  apparent  effect, 
on  the  books,  of  increasing  the 
investment.  The  purchase  rec- 
ords show  stock  purchases  very 
much  in  excess  of  the  capital 
investe'd.  Sales  records  show 
however,  that  this  stock  has  been 
sold. 
"—turiu-a  stock  ouce—"  \   (jpy   goods   man   doing 

$100,000  business  per  year  on  a  $10,000  investment, 
for  instance,  probably  puts  $60,000  to  $70,000  into 
stock — that  is,  re-invests  his  $10,000  capital  from  six 
to  seven  times. 

Knowing  the  amount  of  money  originally  invested, 
the  average  amount  of  stock  on  hand  and  the  total 
amount  of  the  purchase,  the  retailer  can  arrive  at  the 
number  of  times  he  has  turned  his  capital  without 
reference  to  the  amount  of  the  gross  business.  Whether 
he  has  turned  it  at  a  profit  each  time  is  another  matter. 

We  have  purchased  $30,000  worth  of  goods.  Our 
stock  averaged  $5,000.  Our  original  investment  was 
$5,000. 

We  have  re-invested  our  money  six  times.  We  still 
have  the  same  amount  of  stock  we  had  in  the  begin- 
ning.    So  we  have  invested  our  capital  six  times. 

The  hardware  man  who  has  $10,000  worth  of  stock 
when  he  takes  his  inventory  needs  to  know  the  amount 
of  the  purchases  and  the  average  stock  on  hand  to 
arrive  at  the  number  of  his  turnovers. 

When  he  tries  to  figure  the  number  of  turnovers  on 
the  gross  business,  he  must  allow  for  the  profit  on  each 
turn  of  his  capital  before  he  can  know  the  number  of 
turnovers.     He  is  working  without  a  starting  point. 

If  he  knew  the  amount  of  the  purchases  and  the 
average  amount  of  stock  on  hand,  it  would  be  an  easy 
matter  to  see  that  he  has  re-invested  the  amount 


55 


A  Better  Day's  Profits 

represented  by  his  stock  a  certain  number  of  times. 

Suppose  you  had  a  gross  business  of  $10,  had  stock 
on  hand  worth  $1,  and  knew  that  you  averaged  $1 
worth  of  stock  during  any  given  period,  how  many 
times  would  you  have  turned  the  stock  invest- 
ment $1? 

Most  retailers  would  jump  to  the  conclusion  that 
you  had  turned  it  ten  times. 

Now,  let's  see.  Suppose  you  made  50%  gross  profit 
(based  on  selling  price)  at  each  turnover.  Fifty  per 
cent  of  SIO  is  $5,  so  your  total  stock  investment  repre- 
sented in  the  $10  gross  business  was  only  $5. 

You  turn  your  capital  once  when  you  sell  all  the 
goods  you  have  bought,  regardless  of  the  price  at 
which  the  goods  are  sold. 


56 


The  Kubiiison  &  Juiu->  Co..  uj  Nalick.  Mats.,  are  dealers  in  coal,  uood.  brick,  lime, 
grain,  i-lc..  and  operate  a  prain  elevator  in  connection.  A  daily  report  of  business 
done,  keeps  the  manager  of  this  company  in  perfect  touch    uith   the   vnrr.ed  hustness 

57 


The  Purpose  of  the  Inventory 

The  Inventory  is  to  the  stock  record  what 
counting  the  cash  is  to  the  cash  register 

A  CLERK  in  a  retail  drj^-goods  store  sold  half  a 
dozen  items  to  a  customer  for  cash.  As  he  was 
wrapping  up  the  order  he  slipped  ten  yards 
of  silk  into  the  package. 

When  he  rang  up  the  sale  on  the  cash 
register  it  did  not  include  the  ten  yards  of 
silk. 

The  cash  register  didn't  yell 
"murder,"  and  there  was  no 
record  of  the  silk  removed  from 
stock. 

,  r    ,1  i  "—slipped  10  yds.  of  silk- 

When  the  owner  oi  the  store 

counted  his  cash  at  night,  he  found  in  his  cash  register 

just  the  amount  which  the  tape  showed  should  be 

there. 

He  thought  his  clerks  were  all  honest.  He  never 
suspected  anything  to  the  contrary.  Yet  this  one 
clerk  was  as  crooked  as  the  negro  porter's  kinky  hair. 

At  least  a  dozen  of  the  customers  of  the  store 
always  insisted  upon  being  waited  on  by  this  one 
clerk.  Apparently  it  was  friendship  and  good  sales- 
manship. In  reality,  in  this  case,  it  was — something 
else. 

These  customers,  apparently  among  the  best  cus- 
tomers of  the  store,  came  in  almost  every  day.  The 
amount  of  goods  they  took  away  unpaid  for  and  un- 
charged, however,  much  more  than  ate  up  the  profit 
on  the  goods  for  which  they  paid. 

At  the  end  of  the  j^ear  an  inventory  was  taken. 
But  the  method  of  taking  inventory  in  this  store 

58 


The  Purpose  of  the  Inventory 

wasn't  designed  to  uncover  crookedness.  It  was  only 
designed  to  give  the  owner  of  the  store  a  rough  esti- 
mate of  the  amount  of  goods  on  hand. 

The  inventory  was  not  checked  against  the  sales  or 
purchases.     No  stock  record  was  kept. 

About  three  years  after  this  clerk  was  employed  the 
owner  of  the  store  decided  that  he  should  have  a  better 
bookkeeping  system. 

Within  a  month  after  the  complete  system  was  put 
in  operation  the  crookedness  of  the  clerk  was  dis- 
covered. The  loss  was  estimated  at  $1500  a  year 
through  the  dishonesty  of  this  one  clerk. 
(^  The  merchant  now  takes  an  inventory  four  times  a 
year  and  keeps  a  stock  record  which  enables  him  to 
check  his  inventories  against  the  stock  he  should  have 
on  hand.     It  protects  him  and  his  clerks. 

His  purchase  record  shows  him  the  exact  quantity  of 
stock  bought  of  each  line.  When  goods  are  sent  from 
the  stock  room  into  the  store,  the  amount  is  recorded 
in  the  stock  book. 

At  the  end  of  three  months  when  the  goods  in  the 
store  are  inventoried,  the  quantity'  on  hand  in  the 
store,  and  in  the  stock  room,  must  balance  with  the 
stock  as  shown  on  the  stock  record.  ) 

His  new  bookkeeping  system  departmentizes  his 
store  in  such  a  way  that  if  any  particular  line  of  goods 
was  short  he  could  at  once  trace  the  shortage  to  the 
clerk  who  was  in  charge  of  that  department. 

A  DRUGGIST  in  a  Pennsylvania  town  who  had 
never  taken  an  inventory  in  the  ten  years  he 
had  been  in  business,  got  pinched  for  money  and  de- 
cided to  check  up  his  stock  in  the  hope  of  raising 
money  by  a  clean  up  sale. 

He  found  $2500  more  goods  on  his  shelves  than  he 
thought  he  had. 

59 


A  Better  Day's  Profits 

He  thought  he  was  carrying  about 
$8,000  worth  of  stock.  In  reality  he 
was  carrying  $10,500  worth.  He  had 
kept  no  records  that  enabled  him  to 
know  how  much  he  had  purchased; 
how  much  goods  he  had  sold;  or  the 
amount  of  profits  he  had  made. 

If  his  store  had  burned  out  before 

taking  his  inventory  he  would  have     

been  satisfied  with  $8,000  from  the   -—carrying  heavy 
insurance  companies.     He  would  not         stock—" 
have  known  that  he  was  figuring  himself  out  of  $2,500. 

After  he  took  his  inventory  he  was  so  astonished 
at  what  he  found  that  he  decided  to  put  in  a  system 
which  would  enable  him  to  know  exactly  where  he 
stood  all  the  time. 

With  an  accurate  system  he  was  soon  able  to  reduce 
the  amount  of  stock  he  carried  and  to  make  a  great 
deal  more  money. 

The  amount  of  capital  released  by  the  up-to-date 
methods  enabled  him  to  meet  his  bills  and  open 
another  store.     Now  he  conducts  half  a  dozen  stores. 

An  inventory  without  a  stock  record  affords  no 
check  against  the  goods  which  should  show  in  the  in- 
ventory. A  stock  record  without  an  inventory  affords 
no  check  against  the  theft  of  goods  from  stock. 

The  inventory  is  to  the  stock  record  what  the 
counting  of  cash  is  to  the  cash  register. 

Running  along  from  year  to  year  without  knowing 
what  stock  you  have  on  hand  is  no  more  business-like 
than  going  along  from  day  to  day  without  knowing 
what  money  is  in  the  cash  drawer. 

Are  you  only  guessing  at  the  amount  of  stock  you 
have  on  hand?  Is  your  inventory  only  an  estimate  of 
the  amount  of  goods  you  should  have? 

Can  you  honestly  say  that  you  are  a'ble  to  make  as 
much  money  out  of  your  business  without  really 
knowing  all  there  is  to  know  about  it,  as  you  could 
make  out  of  it  if  you  did  have  the  information  at  your 
fingers'  ends?     Be  honest  with  yourself. 

60 


j-^rank  L.   Feisler.  of  Erie,  Pa.,  u  very  enthutiastic  about  his  ty-stem  of  d' , mirilinji. 
A  year  ago  he  declared  his  old  syttem  was  entirely  adequate,     .\o  in- 
ducement 1','ould  ctitue  him  to  go  back  to  It  noH' 


61 


rf 


Weighing''  Employees 


In  scientifically  managed  stores,  every 
clerk  is  a.sales  barometer  whose  readings 
are  always  visible  to  the  manager 


-cloes'he  weigh  a  profit 
or  a  loss — ?" 


THE  head  of  a  big  Chicago  department  store,  look- 
ing over  the  sales  figures  for  the  month,  noticed 
that  the  clothing  department  showed  a  slight  falling 
off  from  the  preceding  month  and  from  the  correspond- 
ing month  of  the  preceding  year. 

On  examining  the  reports 
for  the  sales  of  each  employee 
in  the  department,  he  found 
that  three  of  them  had  made 
less  sales  than  during  the  pre- 
ceding month,  or  during  the 
corresponding  month  of  the 
preceding  year. 

A  further  study  of  the 
figures  proved  that  these  three  clerks  had  shown  a 
steady  falling  off,  while  the  other  two  clerks  in  the 
same  department  had  gradually  built  up  their  sales. 

The  two  clerks  were  costing  about  83^  per  cent  on 
their  gross  sales  as  against  93^  per  cent  for  the  same 
clerks  for  the  preceding  year,  a  nice  increase  in  efficiency. 

The  other  three  clerks,  who  showed  a  falling  off 
were  costing  around  11  to  12  per  cent.  That  is,  their 
salaries  equalled  11  to  12  per  cent  of  their  gross  sales. 

This  brought  the  salary  cost  for  the  department  up 
to  lOj/^  to  11  per  cent  of  the  sales. 

It  wasn't  necessary  for  the  manager  to  call  in  the 
department  head.  No  conferences  were  necessary. 
The  figures  told  the  whole  story.       Two  of  the  five 

62 


"Weighing"  Employees 


-two  clerks  beat  sales  of  three  others- 


clerks  were  good 
clerks  and  three  of 
the  five  were  unprof- 
itable, inefficient. 

In  a  month  the  de- 
partment sales  had 
picked  up  until  the 
salary  cost  was  down 
to  the  regular  9}^  per 
cent — five  good  clerks  were  handling  the  sales. 

In  the  big  stores,  clerks  are  judged  and  paid  on  a 
basis  of  the  amount  of  goods  they  sell.  If  a  clerk  is 
paid  $6  a  week,  she  must  sell  goods  to  the  aggregate  of 
between  S65  and  $70  a  week.  That  is,  her  salary 
cannot  exceed  93^  per  cent  of  her  sales. 

There  is  no  guess-work  about  the  value  of  employees 
in  the  scientifically  managed  stores.  Employees  are 
judged  wholly  by  what  they  do,  and  the  figures  which 
are  furnished  to  the  head  of  the  store  are  figures  which 
enable  him  to  absolutely  know  without  a  question  of 
doubt,  what  every  clerk  is  doing  an(5  what  he  is  worth. 
Every  employee  is  a  barometer,  whose  readings,  in 
dollars  of  sales  and  per  cent  of  cost,  are  always  on  file 
in  the  manager's  office. 

If  the  salary  runs  to  8  or  7  per  cent  the  employee  is 
scheduled  for  a  raise.  If  it  runs  down  to  5  or  i  per 
cent  the  employee  will  soon  be  promoted. 

Have  you  ever  puzzled  over  the  problem  of  whether 
to  raise  the  salary  of  a  certain  employee  who  is  looking 
for  a  better  job? 

Have  you  ever  wondered  whether  the  old  employee 
who  seems  satisfied  to  stay  on  with  you  year  after  year 
without  much  increase  in  salary  is  really  worth  what 
he  is  getting? 

If  you  have  more  than  one  clerk,  are  you  absolutely 
sure  which  is  the  best  one? 


63 


A  better  Day's  Profits 

Do  you  know  whether  one  of  them  is  making  him- 
self "solid"  with  your  customers  by  giving  them  long 
measures  and  over-weights? 

Do  you  know  whether  the  clerk  who  sells  most 
goods  is  really  bringing  in  the  most  profits  or  just 
selling  the  goods  that  go  easiest? 

Wouldn't  it  put  some  warmth  in  your  words  when 
you  tell  John  that  you  are  going  to  give  him  that  extra 
dollar  a  week  he  asked  for,  if  you  could  turn  to  your 
records  and  see  that  John  had  been  showing  a  steady 
increase  in  sales  day  by  day  and  week  by  week  for 
many  months  past? 

And  wouldn't  it  put  backbone  into  your  decision 
not  to  give  Henry  a  raise  when  you  could  see  by  your 
records  that  his  sales  were  showing  a  steady  falling  off? 
Maybe  you  could  even  find  another  "John"  to  take 
his  place. 

Let  John  and  Henry  make  out  a  sales  slip  for  each 
sale.  Have  the  figures  on  these  slips  tabulated  by 
days,  then  recapitulated  into  months.  Then  j^ou  can 
know,  all  the  time  which  is  the  best  clerk. 

It  wouldn't  take  much  time.  The  big  stores  find 
that  it  pays  big  dividends  in  "weighing"  clerks,  in  the 
prevention  of  mistakes,  in  supplying  information 
about  sales  by  lines  of  goods,  by  clerks,  etc. 

It  costs  them  as  much  per  clerk  as  it  would  you. 
Some  of  them  have  as  high  as  5,000  clerks,  all  making 
out  sales  slips  on  every  sale. 

The  average  big  store  can  find  out  more  about  the 
sales  ability  of  any  one  of  its  5,000  clerks  in  five  min- 
utes than  the  average  small  store  could  tell  about  its 
one  clerk  in  a  whole  month. 

The  success  of  big  stores  proves  that  it  pays  to  keep 
records.  Are  you  going  to  let  the  big  fellows  crowd 
you  out  of  business,  or  are  you  going  to  defend  your- 
self with  the  weapons  they  have  sharpened  for  you? 

64 


Retail  >hop  store  of  Trott  &  Uicey.  Erie.  /'<i.— ••((<•  <<ifi  tril  .i(  .■  monwnl  ,  nolut-  the 

exact  amount  of  stock  on  hand  of  each  line,  and  the  exact  sales  in   each 

deixirlmenl."    They  knou-  the  reuili^  ,./  .i.ri   Imsiness  move 


65 


Cutting  Delivery  Expense 

WITH  many  retailers  the  expense  of  maintaining 
efficient  delivery  service  is  a  vitally  important 
item  in  the  cost  of  doing  business. 
Poorly  regulated  delivery  systems 
are  a  detriment  to  trade  and  a  drain 
on  profits.  Efficient  methods  of 
delivery  promote  good  will,  save 
time  and  money,  and  make  for  a 
better  business  generally. 

What  can  be  done  in  the  way  of    "—high  dehvory  expense 

1     I  •  j^  1         1         1  eats  up  a  business 

improvmg  delivery  methods  de- 
pends, of  course,  largely  on  the  local  conditions  the 
merchant  has  to  face.  However,  there  are  certain 
tried  methods  which  have  been  found  effective  weapons 
for  a  progressive  fight  against  rising  costs.  Here  are 
some  of  them. 

In  several  mid-western  cities  merchants  have 
successfully  co-opsrated  on  deliveries.  The  savings 
effected  by  this  means  amount  anywhere  from  25  to 
45  per  cent,  depending  on  the  number  co-operating. 
One  of  the  considerable  savings  comes  in  equipment. 
The  reduced  cost  of  labor  is  another  item.  In  three 
Missouri  cities,  where  co-operative  deliveries  have 
been  tried,  it  has  been  possible  to  eliminate  fifty-nin6 
wagons  and  one  truck. 

Two  methods  of  handling  co-operative  deliveries 
have  been  tried  and  proven  successful.  Under  the 
first  method,  an  independent  company  is  organized, 
which  charges  each  distributor  according  to  the 
number  of  packages  handled  for  him.  Such  delivery 
systems  in  Massachusetts,  Michigan  and  Kansas,  are 

66 


Cutting  Delivery  Expense 


making  money  for  the  owners  and  reducing  costs  for 
the  mercliants. 

The  second  method  is  for  the  retailers  to  co-operate 
among  themselves.  In  a  certain  New  York  town, 
seven  groceries,  three  dry  goods  stores,  and  one  meat 
market  handle  their  deliveries  under  this  plan  and  at 
a  saving  of  sixty  per  cent  over  previous  costs. 

There  areotlieratlvantages  in  centralized  deliveries. 
Among  them  are:  Such  deliveries  are  made  in  all 
directions  at  once,  goods  get  to  the  customers  quicker 
ami  the  retailers  can  close  up  for  the  night  earlier 
than  when  they  deliver  individually.  Deliveries  are 
made  at  regular  specified  intervals,  .and  the  wagons 
run  on  schedule.  Customers  soon  get  used  to  this  fact 
and  order  their  goods  accordingly.  Undoubtedly, 
where  co-operative  systems  are  effectively  managed, 
they  are  a  real  solution  of  the  delivery  problem  for 
many  merchants.  Co-operation  is  a  good  thing  any- 
where. Organized  co-operation  with  the  definite  idea 
of  cutting  delivery  costs,  is  a  money  maker  for  all 
concerned. 


j;iioci  ihiiin  aii.\  wlii'rr 


On  the  other  hand,  where  co-operative  deliveries 
are  impossible  or  impracticable,  the  individual  mer- 
chant can  invariably  get  better  results  by  injecting 
systematic  methods  into  his  delivery  plan. 

There  is  one  stock  objection  to  sj'stematized  de- 
livery. Mrs.  Jones,  who  is  an  old  customer  and  a 
regular  one,  calls  up  at  two  minutes  to  five  and  wants 

67 


A  Better  Day's  Profits 

a  pound  of  butter  or  a  can  of  corn.  The  merchant 
hates  to  refuse  her.  He  calls  the  boy,  or  one  of  his 
clerks  if  the  boy  is  out,  and  has  him  use  store  time  to 
deliver  a  30  cent  package.  What  is  the  result?  Mrs. 
Jones'  good  will  but  also  her  reinforced  belief  that 
she  can  do  it  again.  Systematized  deliveries  avoid 
this  chfficult3^  When  first  installed  such  a  plan  may 
cause  some  temporary  dissatisfaction,  but  when 
customers  learn  that  systematized  delivery  means 
better  prices,  they  forget  their  desire  for  every-hour 
service. 

IN  a  certain  Virginia  city  one  grocer  controls  one 
half  of  the  retail  grocery  trade.  Systematic  delivery 
methods  had  as  large  a  share  as  any  single  factor  in 
building  such  a  business. 

Fourteen  years  ago,  this  retailer  put  his  first  wagon 
on  the  street.  During  the  next  four  years,  his  delivery 
was  more  of  a  drain  on  profits  than  he  thought  it 
ought  to  be,  so  in  1905  he  incorporated  a  separate 
delivery  department. 

At  that  time  he  had  seven  wagons.  These  wagons 
covered  long,  circuitous  routes  which  overlapped  a  lot 
and  got  conflicting  results.  His  accounting  system 
did  not  tell  him  how  much  dehveries  were  costing  him, 
so  he  set  aside  214  per  cent  of  gross  receipts  to  cover 
that  expense.  A  thorough  test  proved  this  estimate 
to  be  entirely  too  low. 

By  raising  it  to  33^  per  cent,  the  grocer  found  that 
the  department  could  about  break  even  organized 
that  way.  But  he  wanted  to  give  his  customers  greater 
service.  Simply  cutting  delivery  expense  was  not  this 
retailer's  idea  of  building  efficient  delivery  service. 
He  wanted  to  keep  his  delivery  system  as  economical 
as  possible  and  at  the  same  time  have  it  serviceable 
enough  to  satisfy  his  customers. 

68 


Cutting  Delivery  Expense 


So  he  set  about  invostisatiiiR  modern  methods  of 
delivery.  He  first  investigated  the  territory  he  had 
to  cover.     Then  he  studied  equipment. 

Routes  were  mapped  out  in  zones  and  certain 
wagons  assigned  to  certain  zones.  Customers  were 
furnished  with  schedules  showing  the  time  of  deliveries 
in  their  section;  and  were  given  to  understand  that 
their  orders  must  be  in  at  least  thirty  minutes  before 
the  departure  of  the  route  wagon  or  truck  in  order 
that  their  goods  might  be  delivered  when  they  wanted 
them.  This  caused  some  grumbling.  But  when  the 
customers  were  educated  to  the  practicality  of  sj'stem- 
atized  delivery,  they  ceased  their  grumblings  and 
were  glad  to  take  advantage  of  the  better  prices  and 
fewer  mistakes  made  possible  by  organization. 

As  the  system  now  operates,  routes  have  been 
specifically  laid  out  in  zones  so  that  no  two  cover  the 
same  territory.  Hourly  service  is  afforded  customers 
in  the  downtown  districts,  deliveries  four,  three  and 
two  times  a  day  are  afTorded  customers  in  the  outlying 
zones;  and  daii}'  deliveries  are  arranged  for  certain 
suburbs.  Automobile  delivery  is  made  only  in  the 
furthest  outlying  zones  and  distant  portions  of  the 
city  proper.  Horse-drawn  vehicles 
make  deliveries  in  the  down  town  zones. 
That  was  one  seemingly  small  thing 
investigation  taught  this  man-  but  it 
means  a  big  saving  of  money. 

Special  deliveries  of  hurry-up  orch-rs 
have  been  .so  firmly  and  persistently 
discouraged  tiiat  customers  seldom 
make  such  requests  now.  This  grocer  .^rdoisnTpL"— "' 
early  learned  that  a  merchant  can't  afford  to  deliver 
a  can  of  corn  "in  a  hurry"  for  diniKM-  without  some- 
body paying  the  bill. 

69 


HOWLAW 


'-ANDMEfi 
&.  COFFINS 


The  middle  photo  shoivs  Howlandy  Texas,  where  the  Howland  Mercantile  Company's 

store   {shown  in  the  top  picture)   is   located.      The  lotver  photo  shoti's  the  general 

store  of  J.  E.   Tull  &  Co.y  of  Kennewick,  Wash.      Both  of  these  are  live  stores 


70 


Accounting  Good  at  the  Bank 

The  sort  of  man  the  hank  says  No  to 
is  the  man  who  doesn't  know  all  the 
facts  about  his  business. — System 

HENRY  JOHNSON  was  a  small  grocer  whose 
specialty  was  fresh  eggs  and  good  butter.  His 
trade  increased  under  the  stimulus  of  right  methods 
and  new  clerks  were  employed.  Finally  his  business 
reached  a  point  where  much  larger  quarters  and  better 
facilities  were  necessary. 

He  kept  his  own  books,  consisting  of  a  daybook  and 
a  ledger,  and  didn't  see  a  need  for  anything  better. 

The  time  came,  however,  when  more  credit  was 
needed  to  meet  the  demands  of  his  increased  business. 
He  went  to  the  bank  to  seek  an  accommodation. 

His  banker  asked  him  for  a  statement  of  his  affairs. 
Of  course  he  was  unable  to  give  a  satisfactory  state- 
ment and  the  loan  was  deferred. 

This  was  a  rather  rude  awakening  to  the  necessities 
of  his  business.  He  took  the  banker's  advice  and 
called  in  an  auditor.  The  auditor  told  him  that  it 
would  be  necessary  to  adapt  his  system  of  accounts  to 
meet  the  changed  conditions  of  his  business. 

His  single-entry  books  had  been  all  right  to  start 
with,  but  they  were  now  too  incomplete.  The  com- 
pleting entries  must  be  made  at  frequent  and  regular 
intervals. 

Additional  accounts  had  to  be  opened  and  the  books 
kept  in  such  a  way  that  ho  could  know  at  all  times 
just  where  he  stood. 

In  short,  he  needed  to  know  as  much  about  his  big 

71 


A  Better  Day's  Profits 

business  now  as  he  was  able  to  know  about  his  business 
when  it  was  little. 

The  auditor's  advice  was  followed.  The  system 
recommended  was  installed,  and  a  competent  book- 
keeper was  put  in  charge. 

Mr.  Johnson  soon  realized  that  he  could  now  do 
what  he  had  long  desired  to  do — branch  out.  It  was 
no  longer  a  necessity  for  him  to  be  constantly  on  the 
job  to  know  what  was  being  done. 

Today  Mr.  Johnson  has  a  string 
of  stores  and  is  known  as  the  "gro- 
cerj-  king"  of  his  city. 

He  has  long  since  ceased  to  be  the 
sort  of  man  the  bank  says  No  to. 
He  knows  the  detail  facts  about  his 
business  so  well  that  his  bank  has 
all  kinds  of  confidence  in  him. 

"There   are  lots  of  business   men 
•'—•grocery  king'  of    who  dou't  really   know  much  about 
his  city—  their    business — bright,    industrious, 

business  men,"  said  a  banker. 

"There's  a  popular  notion  that  a  man  may  be 
expected  to  know  his  own  business.  As  a  banker, 
I've  grown  skeptical  about  it. 

"A  man  may  be  at  his  desk  every  day  and  not 
really  know  what's  happening  in  his  store. 

"The  thing  that  shows  whether  a  business  man's 
request  for  credit  is  right  or  not  is  the  statement  he 
shows  you. 

"Most  banks  now  use  special  forms  and  reports 
that  enable  us  to  know  the  direction  in  which  most 
of  our  prospective  customers  are  going." 

Every  merchant  keeps  some  kind  of  records.  But 
most  of  them  keep  accounts  which  don't  account. 

Some  merchants  neglect  to  keep  complete  records 
because  it  costs  money,  but  they  pay  for  the  records 

72 


Accounting  Good  at  the  Bank 

anyway,   whether  they  keep  them  or  not.     In  fact 
they  pay  most  for  the  records  they  don't  keep. 

Doing  without  a  thing  which  is  needed  does  not 
save  its  cost.  It  always  costs  more  to  do  without  a 
thing  which  is  really  needed  than  the  thing  itself 
would  cost. 

W.  D.  Simmons,  head  of  the  great  Simmons  Hard- 
ware Company,  tells  the  story  of(a  retailer  who  went 
broke  because  he  failed  to  realize  the  importance  of 
being  able  at  any  time  to  show  his  creditors  just  how 
his  business  stood. 

He  didn't  keep  proper  records  of  the  details  of  his 
business.  When  he  got  into  a  close  pinch  and  needed 
credit  or  additional  capital  he  couldn't  show  his 
l)anker  nor  the  supply  house,  any  good  reason  why 
they  should  have  confidence  in  him. 

Things  had  gone  so  far  before  he  really  knew  the 
conditions  he  was  facing,  that  he  couldn't  possibly 
save  himself.     He  was  broke  before  he  knew  it. 

"In  talking  with  him,  afterwards,"  said  Mr.  Sim- 
mons, "I  found  that  he  had  thought  if  he  kept  track 
of  his  invoices  until  they  were  paid,  so  as  to  know  how 
much  he  owed  and  to  whom,  and  kept  a  record  of  the 
amount  of  money  different  people  owed  him,  that  was 
really  all  that  was  necessary. 

"Any  records 
other  than  those, 
he  thought,  were 
'foolishness,'  and 
just  made  extra 
work." 

T-i  1  ,  " — many  stores  for  sale — " 

ll-very  merchant 
has  an   accounting  system   that   he    considers   suffi- 
cient for  his  business.       Most  of   tluMn   even  tliink 
it  is  the  best  system  that  could  l)e  designed  for  their 
business. 

73 


A  Better  Day's  Profits 

That  is  why  so  many  retail  stores  are  for  sale — 
why  only  a  bare  5  per  cent  of  all  retailers  really  make 
a  success  of  their  business. 

That  is  why  so  many  of  them,  like  the  hardware 
man  Mr.  Simmons  tells  about,  are  unable  to  get  credit 
in  a  pinch. 

As  a  test,  could  you  prepare  a  statement  of  your 
business  on  short  notice  that  you,  as  a  banker,  would 
be  willing  to  loan  depositors'  money  on? 

Could  you  produce  a  statement  of  your  business 
in  24  hours  that  would  convince  a  cold-blooded,  hard- 
headed  creditor  that  you  really  knew  your  business? 

If  you  can't,  you  may  come  down  to  the  store  some 
morning  and  find  the  sheriff  ready  to  sell  you  out  to 
satisfy  some  fool  creditor  to  whom  you  can't  prove 
that  you  are  making  money. 

Storms  break  very  quickly,  sometimes.  Be  ready 
for  yours  when  it  comes. 


Uncle  Crabapple  Says: 
Hiram  tried  to  bor- 
row a  hundred  this 
morning.  Th'  man 
that  stands  well  at  th' 
bank  is  th'  man  that 
knows  what  he  made 
last  month  and  has  th' 
figers  V  prove  it.  Hi. 
got  turned  down. 


74 


^        The  Boss's  Eye 

YES,  all  these  things  are  true,"  says  the  retailer, 
"but  how  am  I  going  to  stop  these  leaks.  I  may 
be  so  busy  out  on  the  sidewalk  selling  turnips  that  I 
don't  know  the  molasses  barrel  is  leaking  in  the 
collar." 


" — a  system  will  not  do  anything.    It  only  points  out  the  things  to  be  done — " 

That  is  just  why  this  book  was  written.  No  pro- 
prietor who  is  selling  on  the  sidewalk,  or  behind  the 
counter  for  that  matter,  can  keep  track  of  all  the  leaks, 
unless  he  is  in  a  one-man  business  and  is  selling  every- 
thing for  cash  to  those  who  carry  the  goods  home. 

Then,  the  goods  on  the  shelves,  and  the  cash  in  the 
iiank  and  in  the  cash  drawer,  are  his  assets. 

He  may  be  able  to  sell  the  goods,  or  make  a  phys- 
ical inventory,  in  a  single  day — and  count  his  money 
in  a  few  minutes. 

What  he  owes  are  his  liabilities. 

Everything  is  under  his  own  physical  eye:  he  could 
tell  in  a  short  time  just  what  he  is  worth. 

75 


A  Better  Day's  Profits 

When  he  begins  selling  on  credit,  enlarges  his  busi- 
ness by  adding  one  or  fifty  or  a  hundred  employees, 
buys  goods  that  are  stored  below  and  above,  and 
starts  a  delivery  department,  then  he  no  longer  has 
the  business  under  his  eye — the  molasses  barrel  may 
empty  itself  without  his  being  the  wiser.  Hence  he 
must  have  a  system  that  will  keep  a  record  of  the  re- 
sults of  all  the  activities  of  his  people — of  the  incoming 
and  outgoing  of  the  goods  (which  represent  his  money) 
— that  will  tell  him  the  true  value  of  all  this  activity. 

Any  system  is  just  a  method  by  which  the  Boss  may 
keep  his  eye  on  the  results  of  his  business.  With  an 
adequate  system  he  can  have  in  one  place  an  accurate 
reflection  of  all  that  goes  on  in  his  business. 


" — that  the  boss  may  keep  his  eye  on  the  results  of  his  business — " 

The  system  is  an  accounting  system,  because  it 
accounts  to  him  for  every  penny  that  he  gets  and 
every  penny  lie  pays  out,  in  time,  work  or  goods. 

According  to  the  thoroughness  and  efficiency  of 
the  system  in  searching  out  and  telling  the  whol^ 

76 


The  Boss's  Eye 

truth  about  the  activities  of  the  business  depends 
whether  the  Boss's  Eye  has  a  chance  to  see  the  things 
it  ought  to  see. 

If  the  Sj'stcm  is  right,  then  it  is  up  to  the  Eye  to 
see  the  facts,  and  the  Judgment  to  use  them. 

The  System  will  not  do  anything.  It  will  only 
show  the  Eye  what  ought  to  be  done. 

It  all  comes  l)ack  to  the  Boss  with  the  Eye. 

No  matter  how  handsomely  bound,  or  prettily  ruled 
the  pages  of  the  account  books — no  matter  how  bright 
and  new  his  pens  and  blotters,  or  how  polished  the 
cash  register  and  how  modern  the  adding  machine — 
these  alone  won't  make  a  business  successful. 

They  are  only  the  most  efficient  means  by  which 
to  attain  an  end. 

No  matter,  on  the  other  hand,  how  clever  the 
merchant — if  he  has  no  books  of  account,  or  if  he  has 
inc()nii)lete  accounting  books  and  inefficient  methods 
of  handling  them,  he  can't  make  the  profits  of  the  man 
who  is  his  ecjual  in  merchandising  ability  and  who  has 
a  thorough  system,  efficiently  handled. 

All  businesses  are  "different" — because  each  one 
has  an  individuality — just  as  all  horses  are  "different," 
but  there  are  certain  liorse  qualities  common  to  all. 

So  all  retail  businesses  are  alike  in  the  things  which 
make  them  retailers  and  not  manufacturers,  or  rail- 
roads or  even  wholesalers. 

All  accounting  principles  are  the  same — always; 
I)ut  the  methods  of  applying  them  may  vary. 

You  may  have  loose-leaf  books  or  card-ledgers, 
but  your  debit  and  credit  will  be  the  same:  you  may 
use  a  cash  register,  but  you'll  have  to  have  a  double 
entry  set  of  books,  or  your  credit  won't  be  as  good  as 
the  credit  of  the  man  who  does  have  such  a  set  of 
books. 

77 


A'' Better  Day's  Profits 


I  Assets 

1  Horses  &  Wagons 

I  Furniture  &  Fixtures 

I  Inventory  of  Stock  (By 

I  Depts.j 

1  Freight  on  Purchases  (By 

I  Depts.) 

j  Customers  Ledger  ControU- 

i  ing  Account 

M  (Individual  accounts  may  be  kept 

s  in  tlie  same  binder  with  the  gen- 

^  eral  ledger,  but  should  be  grouped 

s  by  themselves) 

1  Bills  Receivable 

1  Cash  in  Bank 

I  Petty  Cash 

I  Prepaid  Insurance 

j  Proprietor's  Personal 

1  Account 


Liabilities 

Capital  Account 
Audited  Vouchers 

(Controlling  Voucher 
Record) 

Accounts  Payable 

(Controlling  Individual 
Accounts  of  Shippers) 

Accrued  Taxes 

Bills  Payable 

Reserve  for  Doubtful 
Accounts 

Reserve  for  Depreciation 

Profit  and  Loss 


Expense  Accounts      Revenue  Accounts 


Salaries 

Rent,  Light  &  Heat 

Store  Supplies 

Advertising 

Insurance 

Stable  Expense 

Printing  &  Stationery 

Postage 

Telephone  &  Telegraph 

Discounts,  Allowances  & 
Exchange 

Bad  Debts 

Taxes 

Depreciation 

Miscellaneous  Expense 


These 
Accounts 

to  be 
kept  by 
Depart- 
ments 


Sales  &  Cost  of  Sales 
(By  Departments) 

Cash  Discounts  Received 

Other  Income  (Itemize) 


Chart  of  Accounts 

(Showing  the  records  it  is  neces- 
sary to  keep  if  the  retailer 
would  know  where  his  business 
is  headed  for  and  where  his 
profits  come  from.    See  page  43) 


78 


The  Boss's  Eye 

THE  other  clay  a  retailor  who  had  been  doing  a  fair 
business,  said:  "My  business  has  been  increasing 
right  along  year  after  year,  and  very  much  more  than 
expenses  have  increased.  So  it  seems  to  me,  that 
I  ought  to  be  making  quite  a  little  more  money  than 
I  am." 

He  consulted  an  old  business  friend  about  it. 

They  looked  over  his  books,  which  had  been  care- 
fully kept  by  a  young  man  who  had  "picked  up  book- 
keeping." 

It  soon  appeared  that  the  retailer's  books  were  not 
kept  so  he  could  show  how  the  gross  profits  of  any 
month  compared  with  any  other  month.  The  books 
could  not  show  for  any  particular  period  whether 
expenses  had  increased  out  of  proportion  to  other 
things. 

Then  his  friend's  expert  bookkeeper  was  put  to 
work — and  he  soon  found  that  a  trusted  employee 
had  been  stealing  the  profits. 

The  ineffective  accounting  method  couldn't  show 
that  fact — therefore  the  Boss's  Eye  could  not  see  it. 

It  is  not  the  purpose  of  this  little  book  to  show  a 
retailer  how  to  install  a  system  of  accounts.  He 
should  have  that  done  for  him  by  a  man  who  studies 
his  business  and  its  requirements.  It  is  our  purpose 
to  show  him  why  he  should  have  all  the  facts. 

On  page  78  is  shown  a  list  of  accounts  which  a 
retailer  who  rents  his  store,  makes  his  own  deliveries 
and  has,  or  has  not,  a  perpetual  detailed  inventory, 
must  have,  to  intelligently  manage  his  business. 

This  list  is  offered  merely  to  show  the  kinds  of  in- 
formation which  a  retailer  must  have  to  be  safe. 

Remember  there  are  three  things  you  must  answer: 

1 — Where  is  your  cash  and  how  much  have  you? 

2 — How  much  do  you  owe? 

79 


A  Better  Day's  Profits 

3 — Where's  the  stock  you  bought,  how  much  have 
you  sold,  and  how  much  have  you  on  your  shelves? 

If  you  have  a  system  of  accounts  that  tell  you  these 
things,  you  have: 

1 — Protected  yourself  in  knowing  what  you  are 
doing  and  by  knowing  the  value  of  your  activity. 

2 — Protected  your  family — your  wife  and  children 
— so  when  you  are  called  away,  your  administrator  or 
executor  won't  have  to  report  that  "he  left  his  estate 
in  a  badly  tangled  condition."  Neither  will  they 
lose  through  most  of  what  you  leave  being  eaten  up 
in  the  process  of  untangling  of  your  affairs. 

3— Protected  yourself  against  fire  loss,  because 
without  a  system  of  accounts  you  would  probably  be 
unable  to  prove  more  than  60  or  70  per  cent  of  your 
loss. 

4 — Given  yourself  a  chance  to  use  all  the  credit  you 
are  entitled  to  at  the  bank,  by  having  an  accounting 
system  that  shows  what  you  are  doing,  and  that  you 
know  what  you  are  doing. 

Now,  get  started  right  on  this  matter  of  an  account- 
ing system. 

Don't  fool  with  make-shift  systems — short-cut 
ideas  that  cut  the  essential  facts  out  of  the  statements 
you  get. 

A  great  manufacturer  of  accounting  systems  largely 
used  by  retailers  wrote  the  writer  the  other  day: 

"I  have  from  my  experience  come  to  know  that 
the  rank  and  file  of  small  retail  merchants  care  little 
or  nothing  about  system  in  their  business,  and  this 
accounts  for  the  large  proportion  of  failures.  Even 
after  we  succeed  in  installing  one  of  our  systems  very 
few  of  them  will  use  it  correctly;  therefore,  their  suc- 
cess with  it  is  limited.  They  merely  want  a  system 
or  device  that  will  relieve  them  of  the  bookkeeping, 
yet  they  are  not  willing  to  do  the  little  extra  work 

80 


The  Boss's  Eye 

necessary  to  compile  the  comparative  statements  of 
their  business  which  woukl  enable  them  to  more 
intelligently  determine  just  what  progress  they  are 
making." 

(^Get  the  facts.  ■  Hire  a  bookkeeper  who  knows  how 
to  help  you.  Get  started  right.  Then  have  an  expert 
come  in  once  in  a  while  (say  every  throe  months)  and 
check  up  your  work — just  to  keep  you  on  the  right 
track. 

Then  keep  your  Eye  on  the  Expense  and  Income 
accounts. 

When  the  former  jumps,  dig  into  it  and  find  out 
why. 

When  the  latter  decreases,  dig  again  and  find  the 
reason;  when  it  increases,  find  out  what  produces  the 
effect,  and  push  that  good  thing  for  all  you  are  worth. 

Keep  your  Ej'e  on  the  facts  of  the  business.  It 
can't  see  too  many,  and  you  can't  know  too  much 
about  what  those  facts  really  mean. 

That  is  why  the  big  business  has  an  accounting 
system:  and  why  no  permanently  successful  business, 
l)ig  or  little,  has  ever  gotten  along  witliout  an  adequate 
bookkeeping  system. 

No  business  man  has  ever  been  a  failure  because 
he  had  a  bookkeeping  system.  No  business  man  has 
ever  been  successful  because  he  didn't  have  one. 


"Trade  is  a  safe  channel  to  those  that  keep  in 
the  fair  way,  so  the  xailors  call  the  ordinary 
entrance  to  the  harbor;  but  if,  in  contetnpt  of 
dangers  and  warnings,  any  man  wiUrunoulof 
the  course,  neglect  the  buoys  and  marks  which 
are  set  up  for  the  direction  of  sailors,  and  at 
all  hazards  venture  among  the  rocks,  he  is  to 
blame  nobody  but  himself  if  he  loses  his  ship'' 

— Daniel  DeFoe 


81 


L,  C.  Thayer^s   booth  in  one  of  the  Boston  Mtirfiets  is  so  small  he  has  limited  his  ojffice 

to  3x4  feet  and  operates  his  adding  machine  on  a  shelf.      The  loiver  picture    tvas  taken 

through  a  window  because  the  office   teas  too  small  to  get  the  camera  into.      It  shows 

the  office  of  Shaffer,  Candor  &  Hopkins,  Hardivare.  of  Lock  Haven,  Pa. 


82 


Paying  for  What  You  Don't  Get 


//  a  man  needs  a  thing  in  his  business, 
it  is  likely  to  cost  more  not  to  supply  the 
need  than  the  thing  itself  ivould  cost 


—boss  settint;  up  a  stovt 
cost  him  a  830  sale — " 


ADRUMMER,  walking  into  a  hardware  and  im- 
plement store  in  the  corn  belt,  found  the  pro- 
prietor back  in  the  warehouse  setting  up  a  stove. 

After  watching  the 
work  for  a  few  minutes 
the  drummer  interrupted 
him. 

"There's  a  chance  for 
a  man  to  get  a  good 
place  as  manager  of  a 
store  down  the  state," 
he  .began.  "It's  owned 
by  a  stock  company.  At  present  they're  without  a 
manager." 

"The  i)osition  will  pay  S200  a  month  to  the  right 
man.  I'd  like  to  find  some  hustling  fellow  I  could 
put  them  in  touch  with.  They're  good  customers  of 
the  house." 

"Say,  that  looks  good  to  me!"  the  merchant  re- 
turned. "You  know  I've  found  it  jiretty  hard  here, 
for  lack  of  capital.  I  wouldn't  mind  making  a  change 
if  I  could  get  a  place  like  that." 

"Do  you  con.sider  yourself  a  $200  man?"  the 
drummer  asked,  with  a  twinkle  in  his  eye. 

"I  certainly  do!" 

"Well,  you  wouldn't  do  at  all.  That  company 
wouldn't  stand  for  a  manager  who  spends  his  time 

83 


A  Belter  Day's  Profits 

putting  up  stoves  while  a  $60  clerk  is  out  in  the  store 
trying  to  sell  a  hard  customer." 

The  drummer  may  have  been  only  joshing  about 
the  $200  job  to  teach  the  hardware  man  a  lesson,  but 
the  story  has  a  point  just  the  same. 

A  man  who  allowed  himself  a  salary  of  $200  a 
month  was  doing  his  own  bookkeeping  by  hand. 

He  spent  two  hours  a  day  on  his  books,  not  includ- 
ing the  monthly  trial  balance. 

At  that  rate  it  cost  him  about  $1.75  a  day,  $45  a 
month,  to  keep  his  books. 

^*He  bought  a  Burroughs  Bookkeeping  Machine. 
Immediately  he  cut  the  amount  of  the  time  required 
to  one-half.  This  gave  him  even  better  records  at  a 
cost  of  less  than  $25  a  month. 

This  is  a  saving  of  $20  a  month,  $240  in  a  year. 
Before  his  Burroughs  wears  out,  that  saving,  deposited 
regularly  in  a  savings  bank,  would  aggregate  more 
than  $6,000. 

But  that  is  not  all  this  man  saved. 

He  found  that  he  could  get  a  girl  to  keep  his  books 
on  the  machine  as  good  as  he  could  keep  them  by  hand. 

Working  full  time  she  cost  him  but  $1.50  a  day 
and  gave  him  so  much  valuable  information  that  he 
soon  doubled  his  business. 

A  man  is  not  in  business  to  keep  books,  any  more 
than  he  is  in  business  to  sweep  out  his  store.  He  is 
in  business  to  sell  goods. 

Books  are  kept  to  give  him,  every  day,  a  complete 
statement  of  his  business,  so  that  he  may  know  what 
steps  to  take  to  sell  more  goods  profitably. 

When  a  man  is  cooped  up,  in  his  bookkeeping  cage, 
who  is  running  the  business  for  him?  It  is  being  run 
by  his  cheap  clerks. 

Can  a  $60  a  month  clerk  run  a  business  as  well  as  a 
$200  proprietor? 

84 


Paying  Fur   What   You  Don't  Gel 


Of  course  not.  When  the  business  is  homg  run  by 
a  SOO  man,  it  is  a  §00  business.  When  it  is  run  by 
a  $200  man  it  is  a  $200  business. 

That  is  the  difference.  A  $200  man  can  sell  more 
goods.  He  will  drive  away  less  rej^ular  customers. 
Me  can  convert  more  of  the  transient  customers  into 
regular  customers. 

If  he  is  a  S20()  man  he  can  use  more  of  the  figure- 
information  shown  by  the  bookkeeper — if  he  saves  the 
one  hour  to  think  in  and  saves  his  mind  fresh  to  work 
out   ways  of  increasing  his   i)usin('ss. 

One  new  customer  added  to  a 
store's  regular  patronage  every 
day,  means  an  iiu-rcase  in  gross 
business  which  at  the  end  of  a 
year  would  amount  to  Sl.oOO  a 
week     -Slii^.OOO  a  year. 

Five  per  cent  net  profit  on 
that  volume  of  business  will  l)U>' 
a  mighty  fine  automol)ile. 

If  the  proprietor  of  a  store  who  keeps  liis  own  books 
by  hand,  would  save  the  time  which  he  can  save  by 
using  a  Burroughs  and  devotes  that  time  to  thinking 
out  schemes  for  window  displays  and  advertising, 
and  planning  sales  and  better  interior  arrangements, 
and  working  to  put  his  schemes  and  plans  into  use, 
couldn't  he  l)ring  in  one  new  customer  a  day? 

Couldn't  he  make  his  l)usiness  j)ay  lirm  several 
times  more  than  a  Burroughs  would  cost'.' 

If  he  couldn't,  he  isn't  a  $200  man. 

If  you  can  save  one  little  ten  miiuites  ever  day  and 
use  that  ten  minutes  to  thiid<  with,  you  can  increase 
your  business  enough  to  pay  for  several  bookkeeping 
machines  in  one  year. 

You  couhl  get  along  without  scales,  if  you  and  your 
customers  were  satisfied  to  guess  at  weights. 

85 


Iirw   (•11>I(>1I1<T- 


A  Better  Day's  Profits 

You  can  get  along  without  a  Burroughs  if  you  are 
satisfied  to  guess  at  the  figure  facts  about  your  busi- 
ness, or  if  you  are  satisfied  to  pay  the  extra  cost  of 
getting  those  figure  facts  with  a  pencil. 

You  may  not  realize  it,  but  it  is  no  less  unprofitable 
to  go  on  paying  in  leaks  and  losses  and  other  ways  for 
a  Burroughs  you  are  not  using  when  it  would  cost  you 
much  less  to  use  one. 

Talk  the  proposition  over  with  a  Burroughs  man. 
Let  him  explain  to  you  how  it  is  now  costing  you  more 
not  to  use  a  Burroughs  than  it  would  cost  you  to  buy 
and  use  one. 

One  hour  of  your  time  invested  in  a  little  business 
talk  of  this  kind  will  be  worth  a  considerable  sum  to 
you,  even  if  you  don't  decide  to  use  a  Burroughs. 

The  Burroughs  man,  who  will  call  when  you  say 
the  word,  has  talked  with  hundreds  of  other  business 
men — knows  how  they  solved  their  problems — knows 
how  to  apply  their  successful  methods  to  your  busi- 
ness. 

Will  you  talk  with  him  about  it — without  cost  or 
obligation  to  you? 


Economy  is  of  itself  a  Great  Revenue. — Cicero. 
The  famous  Roman  was  speaking  of  true 
economy.  There  is  a  false  economy  which 
prompts  the  hoarding  of  money  at  the  expense 
of  comfort.  But  true  economy  is  expressed  in 
judicious  expenditures — free  from  waste  and 
extravagance— turning  all  money  to  account 

— The  Co-operator 


86 


Keeping  Books  W  iili  a  Machine 

Jl  Ik  1 1  I  he  Burroughs  Is 

THE  Burroughs  is  a 
machine  to  handle 
^1  !?F-j\         '^ll  kinds  of  figures,  in 

TL_     -^ -      ^nt'WW      ;iiiy  way  it  is  desired  to 

handle  them. 

It  is  about  the  size  of 
a  typewriter,  but  very 
much  easier  to  operate. 
The  keyboard  con- 
sists of  several  rows  of 
keys — from  6  to  17, 
depending  upon  the 
size  of  the  machine. 

Each  row  contains 
all  the  figures  from  1  to 
9 — ciphers  print  automatically  where  needed. 

The  rows  are  arranged  in  such  a  way  that  any 
figure  can  l)e  printetl  in  an\-  ('(duinn  by  simply  touch- 
ing the  right  key. 

It  writes  down  figures  just  as  much  more  rajiidly, 
just  as  much  more  legibly,  than  they  can  be  written 
down  by  hand,  as  a  tN^pewriter  writes  letters  more 
rapidly  and  more  legibly  than  they  can  be  written 
by  hand. 

It  automatically  adds  all  the  figures  it  writes  down, 
and  is  ready  at  any  time,  i)y  the  mere  operating  of  a 
handle,  to  record,  without  the  possibility  of  error,  the 
absolutely  correct  total  of  all  the  figures  written — a 
total   wliich   has  been  accumulated   in  the  machine 


The  Burrtm/ihf  full  k,yh„„rd  /« 
fingers  of  the  hand  li>  oiH-rule  art 
nimullaneouslv 


87 


Keeping  Books  With  A  Machine 

during  the  writing 
operation. 

The  Burroughs  is 
not  "Something  to 
learn  how  to  oper- 
ate," but  a  machine 
which  any  book- 
keeper can  begin 
using  the  first  time 
he  sees  it. 

After  five  minutes 
practice,  any  book- 
keeper can    operate 

it    at    a   speed    which         ^^^^   („   $99,999.99;    accommodates  narrow  roll 

will  surprise  anyon3  ^"^"'  """'' '"'""""'  ""'^  ''P'"'  '^"^• 

accustomed  to  doing  such  work  in  the  old  way. 

For  "adding"  there  is  nothing  to  learn;  every 
school  boy  knew  at  ten,  all  that  any  bookkeeper 
needs  to  know  to  add  on  a  Burroughs. 

It  isn't  like 
learning  to  op- 
erate a  type- 
writer, which 
requires  long 
practice  for 
either  speed  or 
accuracy.  You 
don't  "write" 
with  the  keys 
on  the  adding 
machine — you 
only  set  the 
keys.  The  add- 

Burroughs  Statement  Machine,  visible  model;  prints  -  1         1     4- 

months  and  dates;  has  totals  sub-total^  non-odd,  non-print  in&   ^^  CcxlCUlcilj" 

and  repeat  keys  and  accommodates  either  narrow  roll  paper  *  •  +  *        1  ^r 

or  sheets  up  to   12  inches  in  width;  9  columns  of  keys  ^^S     ^^      GntirGiy 


88 


A  Better  Day's  Profits 

automatic.  When  a  key  is  depressed  it  remains  down 
until  the  operating  handle  is  pulled.  You  can  see  what 
is  set  on  the  keyljoard  before  it  is  either  added  or 
printed,  and  correction  can  be  made  anytime  before 
moving  the  operating  handle. 

The  pulling  of  the  handle  causes  all  kej's  to  assume 
their  original  position  and  the  amount  of  the  number 
to  be  printed  on  the  paper  and  totaled  on  the  adding 
wheels.  When  all  the  numbers  are  in  the  machine, 
depressing  the  Total  Key  while  pulling  the  handle 
causes  the  total,  which  has  accumulated  on  the  adding 
wheels,  to  be  printed  at  the  bottom  of  the  column  on  the 
sheet — or  in  any  other  desired  place  on  the  sheet. 

Burroughs  Machines  are  "trouble  proof"  in  more 
senses  than  one.  Besides  protecting  the  machine 
itself,  the  work  that  it  does  is  also  protected. 

Totals,  Sub-Totals  and  Xon-Add  items — all  have 
their  distinctive  symbols,  so  that  the  printed  record 
of  the  machine  tells  a  complete  storj'. 

Not  only  can  the  operator,  but  so  can  any  other 
person,  tell  at  any  time  by  referring  to  the  work 
done  on  the  Burroughs,  just  what  work  had  been 
done.  This  is  why  the  Burroughs  is  u.sed  so  much 
for  permanent  accounting  work.  For  every  Bur- 
roughs operation  there  is  a  special  Burroughs  sj-mbol 
recorded  every  time  the  operation  is  performed. 
Absolutely  no  opening  is  left  for  confusion  or  doubt. 
And  every  unmarked  item  is  known  to  be  added  in 
the  grand  total.  Tlie  star  (*)  printed  at  the  l)eginning 
shows  that  the  machine  is  clear. 

With  every  machine  is  furnished  an  instruction 
book,  which  explains  in  simple  language  and  with 
many  illustrations  how  anybody  can  tlo  a  hundred 
things  with  the  machine  that  the  average  person 
wouldn't  think  of  trying  to  do  without  the  instruction 
book. 

89 


A  Better  Day's  Profits 

How  The  Burroughs  is  Used  in  a 
Retail  Store 

Here  are  a  few  of  the  things  for  which  Burroughs 
Machines  are  being  used  by  thousands  of  retailers: 

Making  up  a   daily  record  of  sales  by  clerks,  by 
departments  and  by  lines  of  goods,  from  sales  slips. 

Reconciling  bank  balances  by  listing  outstanding 
checks. 

Checking  freight  and  cartage  bills. 

Making  bank  deposit  tickets  in  duplicate. 

Adding  and  checking  cash  book. 

Footing  ledger. 

Footing  journal. 

Tabulating  cost  and  selling  price  of  articles  sold. 

Compiling  expenses  by  different  lines  of  goods  and 
by  departments. 

Totaling  and  balancing  outstanding  accounts. 

Making  records  of  C.  O.  D.  orders. 

Figuring  records  of  petty  cash. 

Balancing  daily  cash. 

Proving  daily  ledger  postings,  which  eliminates  trial 
balance  troubles. 

Making  out  and  proving  monthly  statements. 

Compiling  a  record  of  purchases  by  lines  of  goods, 
by  departments,  or  other  divisions. 

Handling  stock  records  and  figuring  inventories. 

Figuring  "turn-overs." 

Auditing  charge  accounts. 

Checking  invoices. 

Checking  vouchers  and  making  voucher  records. 

Posting  to  the  ledger. 

Writing  monthly  statements  to  customers. 

Totaling  detail  of  cash  sales. 

Checking  footings  on  charge  sales 

Figuring  yearly  statements  of  expenses  and  profits. 

Income  tax  reports. 

90 


BiiiToughs  Modern 
Practice 


Across  the  street,  perhaps,  in  a  merchant 

you've  never  visited — across  the  state, 

several  you've  never  heard  of 

E\'EU  since  the   Biirroush.-5  Company  was  organ 
izcd,  twenty-nine  years  ago,  its  men  have  been 
in  close  contact  with    the  planning  and  accounting 
end  of  thousands  of  business  houses. 

Naturally  they  have  learned  a  great  many  things 
about  the  best  accounting  methods  in  use  in  every 
line  of  business. 

The  Burroughs  Department 
of  Modern  Practice  was  organ- 
ized for  the  purpose  of  boiling 
down  this  information  and  to 
put  it  into  shape  to  be  distri- 
buted to  other  business  men 
interested  in  it. 

Several  helpful  business 
books  have  been  written  from 
this  boiled-down  experience.  They  have  gone  out  to 
i)usiness  men  in  all  parts  of  the  world;  and  every- 
where they  have  been  found  useful  and  interesting 
because  they  are  based  on  actual  experience,  not  on 
theory  or  imagined  information. 

One  of  these  books,  "Efficient  Cost  Keeping,"  has 
proved  so  authoritative  on  the  subject  it  treats,  that 
it  has  been  adopted  as  a  text  book  by  tlic  Universities 
of  Michigan,  Wisconsin,  Indiana  and  Minnesota. 

In  order  that  there  might  be  something  especially 
designed  for  the  Retailer,  a  book  which  we  called. 

91 


— !)i)iliiiK  down  exporioiice 
into  business  books — ■" 


A   time-saving,  mistake-preventing,  worry-eliminating  brain  assistant  for  the  retailer 

or  his  bookkeeper.    This  machine,  or  any  one  of  the  98  other  Burroughs,  can  be  used 

on  a  high  stand  at  the  bookkeeper's  desk  or  on  a  low  stand  beside  the  manager's  desk, 

or  directly  on  the  desk  if  desired 


92 


Burroughs  Modern  Practice 


"Why  Don't  You  Go  Home,"  was  written  and  pub- 
lished some  time  ago. 

This  book  was  so  well  received  that  when  the  first 
edition  of  25,000  copies  was  exhaustcMl  it  was  decided 
to  re-issue  the  book  along  more  complete  lines. 

The  result  was  this  Retail  book,  "A  Better  Day's 
Profits,"  probably  the  most  unusual  book  of  its  kind 
ever  published.  A  second  edition,  making  75,000 
copies  in  all,  was  needed  within  four  months.  When 
that  was  exhausted,  the  book  was  revised  and  this,  a 
bigger,  finer  edition  was  gotten  out. 

Naturally  the  men  who  use  Burroughs  Bookkeeping 
Machines  are  progressive  men.  The  fact  that  they 
use  figuring  machines  proves  that  they  are  always  in 
search  of  the  best  methods. 

Nearly  150,000  of  these  business  men  are  always 
ready  and  willing  to  explain  their  best  methods  to  us, 
in  exchange  for  the  methods  that  we 
have  gathered  from  tiiousands  of 
business  men.  For  that  rea- 
son it  is  easy  for  us  to  obtain 
information  that  could  not 
possibly  be  obtained  in  any 
other  way. 

In  reading  this  ])ook,  you 
will  find  many  things  that  will 
strike  you  as  very  unusual.  Possibly  some  things  you 
will  find  hard  to  believe.  ]iut  if  you  could  take  the 
time,  and  cared  to  a.ssume  the  expense,  to  visit  150,000 
business  houses,  in  every  part  of  the  world,  you  would 
find  many  things  that  would  surprise  you. 

In  addition  to  the  information  which  we  have  col- 
lected fir.st  hand,  through  the  personal  contact  of  our 
large  organization,  from  other  business  houses  all  over 
the  world,  we  havi'  also  collected  a  vast  amount  of 
information  by  mail.    All  of  this  information  is  yours, 

93 


"will  strike  you  us  unusual — " 


A  Better  hay^s  Profile 


if  you  care  to  ask  for  it.  It  makes  no  difference  what 
business  you  are  in,  whether  you  own  a  large  store 
or  a  small  one,  there  is  probably  something  in  our 
Research  Files  that  will  parallel  your  business  experi- 
ence. So,  if  this  book  doesn't  satisfy  you,  if  you  have 
a  special  problem  to  solve,  ask  for  access  to  our  files 
by  mail.     You  can  have  what  information  we  have. 

Remember,  though,  that  the  Burroughs  Depart- 
ment of  Modern  Practice  does  not  undertake  to  install 
bookkeeping  systems.  It  offers  only  a  suggestion  ser- 
vice, a  co-operative  helpfulness  by  mail.  The  mem- 
bers of  its  staff  do  not  pose  as  Public  Accountants, 
nor  as  experts.  They  are  Research  Men,  studying  the 
same  problems  as  you. 

Burroughs  Modern  Practice  has  nothing  to  sell.  It 
does  not  buy  anything.  It  is  just  a  department  for 
the  collection  and  distribution  of  ideas  that  help  the 
users  of  Burroughs  Machines  to  use  their  machines  to 
better  advantages,  and  to  help  business  men  find  out 
how  they  can  adapt  book- 
keeping machines  to  their 
work. 

The  service  of  this  depart- 
ment is  available  to  any  busi- 
ness man  who  is  interested  in 
better  bookkeeping  methods, 
whether  he  uses,  or  expects  to 
use  Burroughs  Bookkeeping 
Machines  or  not. 

In  this  book  we  have  only  tried  to  drive  home  in  a 
graphic  way,  the  possibilities  of  better  bookkeeping; 
to  make  retailers  want  more  information;  to  make 
them  see  and  understand  that  they  can  only  succeed 
by  basing  their  efforts  upon  real  information  and 
directing  their  energies  from  positive  knowledge  rather 
than  from  guess. 


-building  effort  upon 
information — " 


94 


Personality  in 
Business 

You  may  learn  from  competitors, 
whether  they  be  in  the  Mail  Order 
business  or  conducting  a  cross-roads 
store.  Here  is  one  of  the  secrets  of 
success  of  a  firm  which  is  a  competi- 
tor of  every  Retail  Store  in  America: 


No  matter  how  large  the  busiuess  grows, 
it  is  ahvays  an  expression  of  personal  force, 
just  as  the  personal  force  of  a  nation  is  the 
sum  total  of  the  personal  force  of  its  people. 

We  believe  that  our  customers  and  em- 
ployees feel  that  our  business  is  as  much  a 
matter  of  personality  today  as  it  was  in  the 
beginning.  Behind  each  transaction  is  per- 
sonal guarantee,  and  we  trust  that  behind 
each  customer  is  personal  interest  in  the 
growth  and  the  perfecting  of  a  system  tiuxt 
seeks  to  interpret  the  personal  desire  of 
each  man,  woman  or  child  who  deals  with  it. 

Thus  its  policy  is  a  composite  of  the 
ideas  of  all  its  customers,  expressing  their 
will  in  all  its  undertakings,  while  its  in- 
crease, growth  and  success  are,  we  believe, 
as  much  matters  of  personal  pride  and 
gratification  to  our  patrons  as  they  are  to 
ourselves  and  our  employees. 

— A.  Montgomery  Ward 


^illlllllliillililllilliliililiiliillllllllilllllllllllllllllillllllillllllllllllllillllllllllllllllO^ 

I9SI*']RD  ED  '90M.7'IS'(l04f)  JCNKINS 

95 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

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